Correlation Between Cassiar Gold and First Majestic
Can any of the company-specific risk be diversified away by investing in both Cassiar Gold 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 Cassiar Gold and First Majestic into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cassiar Gold Corp and First Majestic Silver, you can compare the effects of market volatilities on Cassiar Gold 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 Cassiar Gold with a short position of First Majestic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cassiar Gold and First Majestic.
Diversification Opportunities for Cassiar Gold and First Majestic
0.05 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Cassiar and First is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Cassiar Gold 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 Cassiar Gold 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 Cassiar Gold 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 Cassiar Gold i.e., Cassiar Gold and First Majestic go up and down completely randomly.
Pair Corralation between Cassiar Gold and First Majestic
Assuming the 90 days trading horizon Cassiar Gold Corp is expected to generate 1.1 times more return on investment than First Majestic. However, Cassiar Gold is 1.1 times more volatile than First Majestic Silver. It trades about 0.07 of its potential returns per unit of risk. First Majestic Silver is currently generating about -0.07 per unit of risk. If you would invest 22.00 in Cassiar Gold Corp on November 18, 2024 and sell it today you would earn a total of 3.00 from holding Cassiar Gold Corp or generate 13.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cassiar Gold Corp vs. First Majestic Silver
Performance |
| Timeline |
| Cassiar Gold Corp |
| First Majestic Silver |
Cassiar Gold and First Majestic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cassiar Gold and First Majestic
The main advantage of trading using opposite Cassiar Gold and First Majestic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cassiar Gold 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.| Cassiar Gold vs. Economic Investment Trust | Cassiar Gold vs. Atrium Mortgage Investment | Cassiar Gold vs. Brookfield Investments | Cassiar Gold vs. Data Communications Management |
| First Majestic vs. Broadcom | First Majestic vs. Falcon Energy Materials | First Majestic vs. Maple Peak Investments | First Majestic vs. Rogers Communications |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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