Correlation Between Bluestone Resources and Westward Gold
Can any of the company-specific risk be diversified away by investing in both Bluestone Resources 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 Bluestone Resources and Westward 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 Westward Gold, you can compare the effects of market volatilities on Bluestone Resources 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 Bluestone Resources with a short position of Westward Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bluestone Resources and Westward Gold.
Diversification Opportunities for Bluestone Resources and Westward Gold
0.05 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Bluestone and Westward is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Bluestone Resources and Westward Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Westward Gold 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 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 Bluestone Resources i.e., Bluestone Resources and Westward Gold go up and down completely randomly.
Pair Corralation between Bluestone Resources and Westward Gold
Assuming the 90 days horizon Bluestone Resources is expected to under-perform the Westward Gold. But the otc stock apears to be less risky and, when comparing its historical volatility, Bluestone Resources is 1.85 times less risky than Westward Gold. The otc stock trades about 0.0 of its potential returns per unit of risk. The Westward Gold is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 5.75 in Westward Gold on September 19, 2024 and sell it today you would earn a total of 0.03 from holding Westward Gold or generate 0.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bluestone Resources vs. Westward Gold
Performance |
| Timeline |
| Bluestone Resources |
| Westward Gold |
Bluestone Resources and Westward Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bluestone Resources and Westward Gold
The main advantage of trading using opposite Bluestone Resources and Westward Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bluestone Resources 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.| Bluestone Resources vs. Qubec Nickel Corp | Bluestone Resources vs. IGO Limited | Bluestone Resources vs. Focus Graphite | Bluestone Resources vs. Anson Resources Limited |
| 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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