Correlation Between First Majestic and Americas Gold
Can any of the company-specific risk be diversified away by investing in both First Majestic and Americas 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 Majestic and Americas Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between First Majestic Silver and Americas Gold and, you can compare the effects of market volatilities on First Majestic and Americas 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 Majestic with a short position of Americas Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Majestic and Americas Gold.
Diversification Opportunities for First Majestic and Americas Gold
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between First and Americas is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding First Majestic Silver and Americas Gold and in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Americas Gold and First Majestic 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 Majestic Silver are associated (or correlated) with Americas Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Americas Gold has no effect on the direction of First Majestic i.e., First Majestic and Americas Gold go up and down completely randomly.
Pair Corralation between First Majestic and Americas Gold
Assuming the 90 days horizon First Majestic Silver is expected to under-perform the Americas Gold. But the stock apears to be less risky and, when comparing its historical volatility, First Majestic Silver is 1.39 times less risky than Americas Gold. The stock trades about -0.12 of its potential returns per unit of risk. The Americas Gold and is currently generating about -0.05 of returns per unit of risk over similar time horizon. If you would invest 38.00 in Americas Gold and on September 23, 2024 and sell it today you would lose (3.00) from holding Americas Gold and or give up 7.89% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
First Majestic Silver vs. Americas Gold and
Performance |
| Timeline |
| First Majestic Silver |
| Americas Gold |
First Majestic and Americas Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First Majestic and Americas Gold
The main advantage of trading using opposite First Majestic and Americas Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Majestic position performs unexpectedly, Americas 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 Americas Gold will offset losses from the drop in Americas Gold's long position.| First Majestic vs. Pan American Silver | First Majestic vs. MAG Silver Corp | First Majestic vs. Silvercorp Metals | First Majestic vs. Endeavour Silver Corp |
| Americas Gold vs. Pan American Silver | Americas Gold vs. First Majestic Silver | Americas Gold vs. MAG Silver Corp | Americas Gold vs. Silvercorp Metals |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
Other Complementary Tools
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account |