Correlation Between Asante Gold and Wesdome Gold
Can any of the company-specific risk be diversified away by investing in both Asante 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 Asante 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 Asante Gold and Wesdome Gold Mines, you can compare the effects of market volatilities on Asante 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 Asante Gold with a short position of Wesdome Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Asante Gold and Wesdome Gold.
Diversification Opportunities for Asante Gold and Wesdome Gold
0.15 | Correlation Coefficient |
Average diversification
The 3 months correlation between Asante and Wesdome is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Asante 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 Asante 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 Asante 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 Asante Gold i.e., Asante Gold and Wesdome Gold go up and down completely randomly.
Pair Corralation between Asante Gold and Wesdome Gold
Assuming the 90 days horizon Asante Gold is expected to under-perform the Wesdome Gold. In addition to that, Asante Gold is 1.3 times more volatile than Wesdome Gold Mines. It trades about 0.0 of its total potential returns per unit of risk. Wesdome Gold Mines is currently generating about 0.07 per unit of volatility. If you would invest 510.00 in Wesdome Gold Mines on August 26, 2024 and sell it today you would earn a total of 352.00 from holding Wesdome Gold Mines or generate 69.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Asante Gold vs. Wesdome Gold Mines
Performance |
| Timeline |
| Asante Gold |
| Wesdome Gold Mines |
Asante Gold and Wesdome Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Asante Gold and Wesdome Gold
The main advantage of trading using opposite Asante Gold and Wesdome Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Asante 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.| Asante Gold vs. Ascendant Resources | Asante Gold vs. Cantex Mine Development | Asante Gold vs. Amarc Resources | Asante Gold vs. Sterling Metals Corp |
| Wesdome Gold vs. Ascendant Resources | Wesdome Gold vs. Cantex Mine Development | Wesdome Gold vs. Amarc Resources | Wesdome Gold vs. Sterling Metals Corp |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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