Correlation Between First Majestic and Aya Gold
Can any of the company-specific risk be diversified away by investing in both First Majestic and Aya Gold 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 First Majestic and Aya Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between First Majestic Silver and Aya Gold Silver, you can compare the effects of market volatilities on First Majestic and Aya Gold 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 First Majestic with a short position of Aya Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Majestic and Aya Gold.
Diversification Opportunities for First Majestic and Aya Gold
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between First and Aya is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding First Majestic Silver and Aya Gold Silver in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aya Gold Silver and First Majestic 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 First Majestic Silver are associated (or correlated) with Aya Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aya Gold Silver has no effect on the direction of First Majestic i.e., First Majestic and Aya Gold go up and down completely randomly.
Pair Corralation between First Majestic and Aya Gold
Allowing for the 90-day total investment horizon First Majestic is expected to generate 2.41 times less return on investment than Aya Gold. In addition to that, First Majestic is 1.24 times more volatile than Aya Gold Silver. It trades about 0.06 of its total potential returns per unit of risk. Aya Gold Silver is currently generating about 0.19 per unit of volatility. If you would invest 853.00 in Aya Gold Silver on February 2, 2024 and sell it today you would earn a total of 125.00 from holding Aya Gold Silver or generate 14.65% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 95.65% |
Values | Daily Returns |
First Majestic Silver vs. Aya Gold Silver
Performance |
Timeline |
First Majestic Silver |
Aya Gold Silver |
First Majestic and Aya Gold Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with First Majestic and Aya Gold
The main advantage of trading using opposite First Majestic and Aya Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Majestic position performs unexpectedly, Aya Gold 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 Aya Gold will offset losses from the drop in Aya Gold's long position.First Majestic vs. Aya Gold Silver | First Majestic vs. Discovery Metals Corp | First Majestic vs. Santacruz Silv | First Majestic vs. Bald Eagle Gold |
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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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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