Correlation Between First Mining and Grande Portage
Can any of the company-specific risk be diversified away by investing in both First Mining and Grande Portage 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 Grande Portage 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 Grande Portage Resources, you can compare the effects of market volatilities on First Mining and Grande Portage 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 Grande Portage. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Mining and Grande Portage.
Diversification Opportunities for First Mining and Grande Portage
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between First and Grande is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding First Mining Gold and Grande Portage Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Grande Portage Resources 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 Grande Portage. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Grande Portage Resources has no effect on the direction of First Mining i.e., First Mining and Grande Portage go up and down completely randomly.
Pair Corralation between First Mining and Grande Portage
Assuming the 90 days horizon First Mining Gold is expected to generate 0.82 times more return on investment than Grande Portage. However, First Mining Gold is 1.22 times less risky than Grande Portage. It trades about -0.14 of its potential returns per unit of risk. Grande Portage Resources is currently generating about -0.36 per unit of risk. If you would invest 11.00 in First Mining Gold on August 29, 2024 and sell it today you would lose (1.70) from holding First Mining Gold or give up 15.45% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
First Mining Gold vs. Grande Portage Resources
Performance |
| Timeline |
| First Mining Gold |
| Grande Portage Resources |
First Mining and Grande Portage Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First Mining and Grande Portage
The main advantage of trading using opposite First Mining and Grande Portage positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Mining position performs unexpectedly, Grande Portage 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 Grande Portage will offset losses from the drop in Grande Portage's long position.| First Mining vs. Silver Hammer Mining | First Mining vs. Reyna Silver Corp | First Mining vs. Guanajuato Silver | First Mining vs. Silver One Resources |
| Grande Portage vs. Silver Hammer Mining | Grande Portage vs. Reyna Silver Corp | Grande Portage vs. Guanajuato Silver | Grande Portage vs. Silver One Resources |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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