Correlation Between Baru Gold and Westward Gold
Can any of the company-specific risk be diversified away by investing in both Baru Gold and Westward 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 Baru Gold and Westward Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Baru Gold Corp and Westward Gold, you can compare the effects of market volatilities on Baru Gold and Westward 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 Baru Gold with a short position of Westward Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Baru Gold and Westward Gold.
Diversification Opportunities for Baru Gold and Westward Gold
0.09 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Baru and Westward is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Baru Gold Corp and Westward Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Westward Gold and Baru 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 Baru Gold Corp are associated (or correlated) with Westward Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Westward Gold has no effect on the direction of Baru Gold i.e., Baru Gold and Westward Gold go up and down completely randomly.
Pair Corralation between Baru Gold and Westward Gold
Assuming the 90 days horizon Baru Gold Corp is expected to generate 1.85 times more return on investment than Westward Gold. However, Baru Gold is 1.85 times more volatile than Westward Gold. It trades about 0.37 of its potential returns per unit of risk. Westward Gold is currently generating about 0.06 per unit of risk. If you would invest 1.74 in Baru Gold Corp on September 19, 2024 and sell it today you would earn a total of 3.20 from holding Baru Gold Corp or generate 183.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Baru Gold Corp vs. Westward Gold
Performance |
| Timeline |
| Baru Gold Corp |
| Westward Gold |
Baru Gold and Westward Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Baru Gold and Westward Gold
The main advantage of trading using opposite Baru Gold and Westward Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Baru Gold position performs unexpectedly, Westward 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 Westward Gold will offset losses from the drop in Westward Gold's long position.| Baru Gold vs. Allegiant Gold | Baru Gold vs. 1911 Gold Corp | Baru Gold vs. Altamira Gold Corp | Baru Gold vs. Gold Terra Resource |
| Westward Gold vs. Heliostar Metals | Westward Gold vs. Revival Gold | Westward Gold vs. Cabral Gold | Westward Gold vs. Cassiar Gold 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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