Correlation Between Golden Arrow and First Majestic
Can any of the company-specific risk be diversified away by investing in both Golden Arrow 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 Golden Arrow and First Majestic into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Golden Arrow Resources and First Majestic Silver, you can compare the effects of market volatilities on Golden Arrow 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 Golden Arrow with a short position of First Majestic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Golden Arrow and First Majestic.
Diversification Opportunities for Golden Arrow and First Majestic
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between Golden and First is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Golden Arrow Resources 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 Golden Arrow 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 Golden Arrow Resources 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 Golden Arrow i.e., Golden Arrow and First Majestic go up and down completely randomly.
Pair Corralation between Golden Arrow and First Majestic
Assuming the 90 days horizon Golden Arrow Resources is expected to generate 1.94 times more return on investment than First Majestic. However, Golden Arrow is 1.94 times more volatile than First Majestic Silver. It trades about 0.11 of its potential returns per unit of risk. First Majestic Silver is currently generating about 0.06 per unit of risk. If you would invest 4.00 in Golden Arrow Resources on August 30, 2024 and sell it today you would earn a total of 1.00 from holding Golden Arrow Resources or generate 25.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 97.67% |
| Values | Daily Returns |
Golden Arrow Resources vs. First Majestic Silver
Performance |
| Timeline |
| Golden Arrow Resources |
| First Majestic Silver |
Golden Arrow and First Majestic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Golden Arrow and First Majestic
The main advantage of trading using opposite Golden Arrow and First Majestic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Golden Arrow 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.| Golden Arrow vs. First Majestic Silver | Golden Arrow vs. Ivanhoe Energy | Golden Arrow vs. Orezone Gold Corp | Golden Arrow vs. Faraday Copper Corp |
| First Majestic vs. Canso Select Opportunities | First Majestic vs. Caribbean Utilities | First Majestic vs. Toronto Dominion Bank | First Majestic vs. Diamond Estates Wines |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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