Correlation Between Labrador Gold and First Majestic
Can any of the company-specific risk be diversified away by investing in both Labrador 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 Labrador 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 Labrador Gold Corp and First Majestic Silver, you can compare the effects of market volatilities on Labrador 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 Labrador Gold with a short position of First Majestic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Labrador Gold and First Majestic.
Diversification Opportunities for Labrador Gold and First Majestic
0.11 | Correlation Coefficient |
Average diversification
The 3 months correlation between Labrador and First is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Labrador 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 Labrador 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 Labrador 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 Labrador Gold i.e., Labrador Gold and First Majestic go up and down completely randomly.
Pair Corralation between Labrador Gold and First Majestic
Assuming the 90 days horizon Labrador Gold Corp is expected to generate 1.94 times more return on investment than First Majestic. However, Labrador Gold is 1.94 times more volatile than First Majestic Silver. It trades about 0.06 of its potential returns per unit of risk. First Majestic Silver is currently generating about -0.02 per unit of risk. If you would invest 7.00 in Labrador Gold Corp on December 11, 2024 and sell it today you would earn a total of 0.50 from holding Labrador Gold Corp or generate 7.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Labrador Gold Corp vs. First Majestic Silver
Performance |
| Timeline |
| Labrador Gold Corp |
| First Majestic Silver |
Labrador Gold and First Majestic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Labrador Gold and First Majestic
The main advantage of trading using opposite Labrador Gold and First Majestic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Labrador 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.| Labrador Gold vs. Dream Office Real | Labrador Gold vs. XXIX Metal Corp | Labrador Gold vs. California Nanotechnologies Corp | Labrador Gold vs. Osisko Metals |
| First Majestic vs. Micron Technology, | First Majestic vs. CVS HEALTH CDR | First Majestic vs. NeuPath Health | First Majestic vs. Bausch Health Companies |
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 CEOs Directory module to screen CEOs from public companies around the world.
Other Complementary Tools
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk |