Correlation Between G6 Materials and First Majestic
Can any of the company-specific risk be diversified away by investing in both G6 Materials and First Majestic 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 G6 Materials and First Majestic into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between G6 Materials Corp and First Majestic Silver, you can compare the effects of market volatilities on G6 Materials and First Majestic 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 G6 Materials with a short position of First Majestic. Check out your portfolio center. Please also check ongoing floating volatility patterns of G6 Materials and First Majestic.
Diversification Opportunities for G6 Materials and First Majestic
-0.19 | Correlation Coefficient |
Good diversification
The 3 months correlation between GGG and First is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding G6 Materials Corp and First Majestic Silver in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Majestic Silver and G6 Materials 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 G6 Materials Corp are associated (or correlated) with First Majestic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Majestic Silver has no effect on the direction of G6 Materials i.e., G6 Materials and First Majestic go up and down completely randomly.
Pair Corralation between G6 Materials and First Majestic
Assuming the 90 days horizon G6 Materials Corp is expected to generate 3.39 times more return on investment than First Majestic. However, G6 Materials is 3.39 times more volatile than First Majestic Silver. It trades about 0.05 of its potential returns per unit of risk. First Majestic Silver is currently generating about 0.04 per unit of risk. If you would invest 4.00 in G6 Materials Corp on September 14, 2024 and sell it today you would earn a total of 0.00 from holding G6 Materials Corp or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
G6 Materials Corp vs. First Majestic Silver
Performance |
| Timeline |
| G6 Materials Corp |
| First Majestic Silver |
G6 Materials and First Majestic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with G6 Materials and First Majestic
The main advantage of trading using opposite G6 Materials and First Majestic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if G6 Materials position performs unexpectedly, First Majestic 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 First Majestic will offset losses from the drop in First Majestic's long position.| G6 Materials vs. First Majestic Silver | G6 Materials vs. Ivanhoe Energy | G6 Materials vs. Orezone Gold Corp | G6 Materials vs. Faraday Copper Corp |
| First Majestic vs. Canso Credit Trust | First Majestic vs. NorthWest Healthcare Properties | First Majestic vs. National Bank of | First Majestic vs. Metalero Mining Corp |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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