Correlation Between Independence Gold and First Majestic
Can any of the company-specific risk be diversified away by investing in both Independence 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 Independence 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 Independence Gold Corp and First Majestic Silver, you can compare the effects of market volatilities on Independence 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 Independence Gold with a short position of First Majestic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Independence Gold and First Majestic.
Diversification Opportunities for Independence Gold and First Majestic
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Independence and First is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Independence 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 Independence 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 Independence 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 Independence Gold i.e., Independence Gold and First Majestic go up and down completely randomly.
Pair Corralation between Independence Gold and First Majestic
Assuming the 90 days horizon Independence Gold is expected to generate 1.51 times less return on investment than First Majestic. In addition to that, Independence Gold is 1.46 times more volatile than First Majestic Silver. It trades about 0.03 of its total potential returns per unit of risk. First Majestic Silver is currently generating about 0.06 per unit of volatility. If you would invest 811.00 in First Majestic Silver on August 30, 2024 and sell it today you would earn a total of 50.00 from holding First Majestic Silver or generate 6.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 97.67% |
| Values | Daily Returns |
Independence Gold Corp vs. First Majestic Silver
Performance |
| Timeline |
| Independence Gold Corp |
| First Majestic Silver |
Independence Gold and First Majestic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Independence Gold and First Majestic
The main advantage of trading using opposite Independence Gold and First Majestic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Independence 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.| Independence Gold vs. Kesselrun Resources | Independence Gold vs. Altiplano Metals | Independence Gold vs. Rockhaven Resources | Independence Gold vs. Magnum Goldcorp |
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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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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