Correlation Between Stakeholder Gold and First Majestic
Can any of the company-specific risk be diversified away by investing in both Stakeholder 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 Stakeholder 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 Stakeholder Gold Corp and First Majestic Silver, you can compare the effects of market volatilities on Stakeholder 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 Stakeholder Gold with a short position of First Majestic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Stakeholder Gold and First Majestic.
Diversification Opportunities for Stakeholder Gold and First Majestic
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Stakeholder and First is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Stakeholder 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 Stakeholder 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 Stakeholder 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 Stakeholder Gold i.e., Stakeholder Gold and First Majestic go up and down completely randomly.
Pair Corralation between Stakeholder Gold and First Majestic
Assuming the 90 days horizon Stakeholder Gold Corp is expected to under-perform the First Majestic. In addition to that, Stakeholder Gold is 1.65 times more volatile than First Majestic Silver. It trades about -0.02 of its total potential returns per unit of risk. First Majestic Silver is currently generating about 0.09 per unit of volatility. If you would invest 864.00 in First Majestic Silver on September 12, 2024 and sell it today you would earn a total of 44.00 from holding First Majestic Silver or generate 5.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Stakeholder Gold Corp vs. First Majestic Silver
Performance |
| Timeline |
| Stakeholder Gold Corp |
| First Majestic Silver |
Stakeholder Gold and First Majestic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Stakeholder Gold and First Majestic
The main advantage of trading using opposite Stakeholder Gold and First Majestic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Stakeholder 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.| Stakeholder Gold vs. Ressources Minieres Radisson | Stakeholder Gold vs. Galantas Gold Corp | Stakeholder Gold vs. Red Pine Exploration | Stakeholder Gold vs. Kore Mining |
| First Majestic vs. Wishpond Technologies | First Majestic vs. 2028 Investment Grade | First Majestic vs. Tree Island Steel | First Majestic vs. Advent Wireless |
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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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