Correlation Between First Mining and Centerra Gold
Can any of the company-specific risk be diversified away by investing in both First Mining and Centerra Gold 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 Centerra Gold 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 Centerra Gold, you can compare the effects of market volatilities on First Mining and Centerra Gold 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 Centerra Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Mining and Centerra Gold.
Diversification Opportunities for First Mining and Centerra Gold
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between First and Centerra is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding First Mining Gold and Centerra Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Centerra 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 Centerra Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Centerra Gold has no effect on the direction of First Mining i.e., First Mining and Centerra Gold go up and down completely randomly.
Pair Corralation between First Mining and Centerra Gold
Assuming the 90 days horizon First Mining Gold is expected to generate 1.99 times more return on investment than Centerra Gold. However, First Mining is 1.99 times more volatile than Centerra Gold. It trades about -0.05 of its potential returns per unit of risk. Centerra Gold is currently generating about -0.12 per unit of risk. If you would invest 9.80 in First Mining Gold on September 3, 2024 and sell it today you would lose (0.65) from holding First Mining Gold or give up 6.63% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
First Mining Gold vs. Centerra Gold
Performance |
| Timeline |
| First Mining Gold |
| Centerra Gold |
First Mining and Centerra Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First Mining and Centerra Gold
The main advantage of trading using opposite First Mining and Centerra Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Mining position performs unexpectedly, Centerra Gold 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 Centerra Gold will offset losses from the drop in Centerra Gold's long position.| First Mining vs. Aurion Resources | First Mining vs. Orezone Gold Corp | First Mining vs. Rio2 Limited | First Mining vs. Norsemont Mining |
| Centerra Gold vs. Gold Fields Ltd | Centerra Gold vs. Eldorado Gold Corp | Centerra Gold vs. Osisko Gold Ro | Centerra Gold vs. SSR Mining |
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 Stocks Directory module to find actively traded stocks across global markets.
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