Correlation Between Bluestone Resources and Wesdome Gold
Can any of the company-specific risk be diversified away by investing in both Bluestone Resources 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 Bluestone Resources and Wesdome Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bluestone Resources and Wesdome Gold Mines, you can compare the effects of market volatilities on Bluestone Resources 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 Bluestone Resources with a short position of Wesdome Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bluestone Resources and Wesdome Gold.
Diversification Opportunities for Bluestone Resources and Wesdome Gold
0.03 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Bluestone and Wesdome is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Bluestone Resources 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 Bluestone Resources 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 Bluestone Resources 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 Bluestone Resources i.e., Bluestone Resources and Wesdome Gold go up and down completely randomly.
Pair Corralation between Bluestone Resources and Wesdome Gold
Assuming the 90 days horizon Bluestone Resources is expected to generate 3.76 times more return on investment than Wesdome Gold. However, Bluestone Resources is 3.76 times more volatile than Wesdome Gold Mines. It trades about 0.04 of its potential returns per unit of risk. Wesdome Gold Mines is currently generating about 0.07 per unit of risk. If you would invest 20.00 in Bluestone Resources on August 26, 2024 and sell it today you would earn a total of 2.00 from holding Bluestone Resources or generate 10.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 88.29% |
| Values | Daily Returns |
Bluestone Resources vs. Wesdome Gold Mines
Performance |
| Timeline |
| Bluestone Resources |
| Wesdome Gold Mines |
Bluestone Resources and Wesdome Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bluestone Resources and Wesdome Gold
The main advantage of trading using opposite Bluestone Resources and Wesdome Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bluestone Resources 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.| Bluestone Resources vs. Norra Metals Corp | Bluestone Resources vs. ZincX Resources Corp | Bluestone Resources vs. Nuinsco Resources Limited | Bluestone Resources vs. Mundoro Capital |
| 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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