Correlation Between OceanaGold and First Majestic
Can any of the company-specific risk be diversified away by investing in both OceanaGold 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 OceanaGold and First Majestic into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between OceanaGold and First Majestic Silver, you can compare the effects of market volatilities on OceanaGold 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 OceanaGold with a short position of First Majestic. Check out your portfolio center. Please also check ongoing floating volatility patterns of OceanaGold and First Majestic.
Diversification Opportunities for OceanaGold and First Majestic
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between OceanaGold and First is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding OceanaGold 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 OceanaGold 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 OceanaGold 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 OceanaGold i.e., OceanaGold and First Majestic go up and down completely randomly.
Pair Corralation between OceanaGold and First Majestic
Assuming the 90 days trading horizon OceanaGold is expected to generate 0.85 times more return on investment than First Majestic. However, OceanaGold is 1.17 times less risky than First Majestic. It trades about 0.06 of its potential returns per unit of risk. First Majestic Silver is currently generating about 0.0 per unit of risk. If you would invest 239.00 in OceanaGold on September 2, 2024 and sell it today you would earn a total of 203.00 from holding OceanaGold or generate 84.94% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
OceanaGold vs. First Majestic Silver
Performance |
Timeline |
OceanaGold |
First Majestic Silver |
OceanaGold and First Majestic Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with OceanaGold and First Majestic
The main advantage of trading using opposite OceanaGold and First Majestic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if OceanaGold 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.The idea behind OceanaGold and First Majestic Silver pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.First Majestic vs. Converge Technology Solutions | First Majestic vs. Firan Technology Group | First Majestic vs. Broadcom | First Majestic vs. Perseus Mining |
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.
Other Complementary Tools
Commodity Directory Find actively traded commodities issued by global exchanges | |
Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets |