Correlation Between Wescan Goldfields and First Majestic
Can any of the company-specific risk be diversified away by investing in both Wescan Goldfields 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 Wescan Goldfields and First Majestic into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Wescan Goldfields and First Majestic Silver, you can compare the effects of market volatilities on Wescan Goldfields 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 Wescan Goldfields with a short position of First Majestic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wescan Goldfields and First Majestic.
Diversification Opportunities for Wescan Goldfields and First Majestic
0.18 | Correlation Coefficient |
Average diversification
The 3 months correlation between Wescan and First is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Wescan Goldfields 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 Wescan Goldfields 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 Wescan Goldfields 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 Wescan Goldfields i.e., Wescan Goldfields and First Majestic go up and down completely randomly.
Pair Corralation between Wescan Goldfields and First Majestic
Assuming the 90 days horizon Wescan Goldfields is expected to under-perform the First Majestic. In addition to that, Wescan Goldfields is 2.42 times more volatile than First Majestic Silver. It trades about -0.21 of its total potential returns per unit of risk. First Majestic Silver is currently generating about -0.13 per unit of volatility. If you would invest 972.00 in First Majestic Silver on September 5, 2024 and sell it today you would lose (89.00) from holding First Majestic Silver or give up 9.16% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Wescan Goldfields vs. First Majestic Silver
Performance |
| Timeline |
| Wescan Goldfields |
| First Majestic Silver |
Wescan Goldfields and First Majestic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wescan Goldfields and First Majestic
The main advantage of trading using opposite Wescan Goldfields and First Majestic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wescan Goldfields 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.| Wescan Goldfields vs. First Majestic Silver | Wescan Goldfields vs. Ivanhoe Energy | Wescan Goldfields vs. Orezone Gold Corp | Wescan Goldfields vs. Faraday Copper Corp |
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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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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