Correlation Between Goldcorp and First Majestic

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Can any of the company-specific risk be diversified away by investing in both Goldcorp 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 Goldcorp and First Majestic into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Goldcorp and First Majestic Silver, you can compare the effects of market volatilities on Goldcorp 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 Goldcorp with a short position of First Majestic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Goldcorp and First Majestic.

Diversification Opportunities for Goldcorp and First Majestic

0.0
  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between Goldcorp and First is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Goldcorp 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 Goldcorp 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 Goldcorp 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 Goldcorp i.e., Goldcorp and First Majestic go up and down completely randomly.

Pair Corralation between Goldcorp and First Majestic

If you would invest (100.00) in Goldcorp on December 29, 2023 and sell it today you would earn a total of  100.00  from holding Goldcorp or generate -100.0% return on investment over 90 days.
Time Period3 Months [change]
DirectionFlat 
StrengthInsignificant
Accuracy0.0%
ValuesDaily Returns

Goldcorp  vs.  First Majestic Silver

 Performance 
       Timeline  
Goldcorp 

Risk-Adjusted Performance

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Very Weak
Over the last 90 days Goldcorp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable technical and fundamental indicators, Goldcorp is not utilizing all of its potentials. The recent stock price disturbance, may contribute to mid-run losses for the stockholders.
First Majestic Silver 

Risk-Adjusted Performance

0 of 100

 
Low
 
High
Very Weak
Over the last 90 days First Majestic Silver has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable technical and fundamental indicators, First Majestic is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Goldcorp and First Majestic Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Goldcorp and First Majestic

The main advantage of trading using opposite Goldcorp and First Majestic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Goldcorp 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 Goldcorp 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.
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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 Commodity Directory module to find actively traded commodities issued by global exchanges.

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