Correlation Between Alamos Gold and Wesdome Gold
Can any of the company-specific risk be diversified away by investing in both Alamos Gold and Wesdome 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 Alamos Gold and Wesdome Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Alamos Gold and Wesdome Gold Mines, you can compare the effects of market volatilities on Alamos Gold and Wesdome 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 Alamos Gold with a short position of Wesdome Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alamos Gold and Wesdome Gold.
Diversification Opportunities for Alamos Gold and Wesdome Gold
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Alamos and Wesdome is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Alamos Gold and Wesdome Gold Mines in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wesdome Gold Mines and Alamos 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 Alamos Gold are associated (or correlated) with Wesdome Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wesdome Gold Mines has no effect on the direction of Alamos Gold i.e., Alamos Gold and Wesdome Gold go up and down completely randomly.
Pair Corralation between Alamos Gold and Wesdome Gold
Assuming the 90 days trading horizon Alamos Gold is expected to under-perform the Wesdome Gold. But the stock apears to be less risky and, when comparing its historical volatility, Alamos Gold is 1.23 times less risky than Wesdome Gold. The stock trades about -0.19 of its potential returns per unit of risk. The Wesdome Gold Mines is currently generating about -0.04 of returns per unit of risk over similar time horizon. If you would invest 1,246 in Wesdome Gold Mines on August 28, 2024 and sell it today you would lose (41.00) from holding Wesdome Gold Mines or give up 3.29% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Alamos Gold vs. Wesdome Gold Mines
Performance |
| Timeline |
| Alamos Gold |
| Wesdome Gold Mines |
Alamos Gold and Wesdome Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alamos Gold and Wesdome Gold
The main advantage of trading using opposite Alamos Gold and Wesdome Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alamos Gold position performs unexpectedly, Wesdome 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 Wesdome Gold will offset losses from the drop in Wesdome Gold's long position.| Alamos Gold vs. Advent Wireless | Alamos Gold vs. Information Services | Alamos Gold vs. Verizon Communications CDR | Alamos Gold vs. Cogeco Communications |
| Wesdome Gold vs. OceanaGold | Wesdome Gold vs. Torex Gold Resources | Wesdome Gold vs. Alamos Gold | Wesdome Gold vs. Dundee Precious Metals |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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