Correlation Between Guanajuato Silver and First Mining
Can any of the company-specific risk be diversified away by investing in both Guanajuato Silver and First Mining 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 Guanajuato Silver and First Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Guanajuato Silver and First Mining Gold, you can compare the effects of market volatilities on Guanajuato Silver and First Mining 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 Guanajuato Silver with a short position of First Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guanajuato Silver and First Mining.
Diversification Opportunities for Guanajuato Silver and First Mining
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Guanajuato and First is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Guanajuato Silver and First Mining Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Mining Gold and Guanajuato Silver 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 Guanajuato Silver are associated (or correlated) with First Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Mining Gold has no effect on the direction of Guanajuato Silver i.e., Guanajuato Silver and First Mining go up and down completely randomly.
Pair Corralation between Guanajuato Silver and First Mining
Assuming the 90 days horizon Guanajuato Silver is expected to under-perform the First Mining. In addition to that, Guanajuato Silver is 1.15 times more volatile than First Mining Gold. It trades about -0.05 of its total potential returns per unit of risk. First Mining Gold is currently generating about -0.01 per unit of volatility. If you would invest 9.90 in First Mining Gold on August 29, 2024 and sell it today you would lose (0.60) from holding First Mining Gold or give up 6.06% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 97.67% |
| Values | Daily Returns |
Guanajuato Silver vs. First Mining Gold
Performance |
| Timeline |
| Guanajuato Silver |
| First Mining Gold |
Guanajuato Silver and First Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Guanajuato Silver and First Mining
The main advantage of trading using opposite Guanajuato Silver and First Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guanajuato Silver position performs unexpectedly, First Mining 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 Mining will offset losses from the drop in First Mining's long position.| Guanajuato Silver vs. Aya Gold Silver | Guanajuato Silver vs. Andean Precious Metals | Guanajuato Silver vs. Dolly Varden Silver | Guanajuato Silver vs. MAG Silver Corp |
| First Mining vs. Silver Hammer Mining | First Mining vs. Reyna Silver Corp | First Mining vs. Guanajuato Silver | First Mining 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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