Correlation Between First Mining and American Eagle
Can any of the company-specific risk be diversified away by investing in both First Mining and American Eagle at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining First Mining and American Eagle into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between First Mining Gold and American Eagle Gold, you can compare the effects of market volatilities on First Mining and American Eagle and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in First Mining with a short position of American Eagle. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Mining and American Eagle.
Diversification Opportunities for First Mining and American Eagle
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between First and American is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding First Mining Gold and American Eagle Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Eagle Gold and First Mining is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on First Mining Gold are associated (or correlated) with American Eagle. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American Eagle Gold has no effect on the direction of First Mining i.e., First Mining and American Eagle go up and down completely randomly.
Pair Corralation between First Mining and American Eagle
Assuming the 90 days horizon First Mining Gold is expected to generate 0.51 times more return on investment than American Eagle. However, First Mining Gold is 1.94 times less risky than American Eagle. It trades about -0.11 of its potential returns per unit of risk. American Eagle Gold is currently generating about -0.08 per unit of risk. If you would invest 9.30 in First Mining Gold on December 1, 2024 and sell it today you would lose (0.50) from holding First Mining Gold or give up 5.38% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
First Mining Gold vs. American Eagle Gold
Performance |
| Timeline |
| First Mining Gold |
| American Eagle Gold |
First Mining and American Eagle Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First Mining and American Eagle
The main advantage of trading using opposite First Mining and American Eagle positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Mining position performs unexpectedly, American Eagle can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in American Eagle will offset losses from the drop in American Eagle's long position.| First Mining vs. Aurion Resources | First Mining vs. Orezone Gold Corp | First Mining vs. Rio2 Limited | First Mining vs. Norsemont Mining |
| American Eagle vs. Minnova Corp | American Eagle vs. Blue Star Gold | American Eagle vs. Advance Gold Corp | American Eagle vs. Argo Gold |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
Other Complementary Tools
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| CEOs Directory Screen CEOs from public companies around the world |