Correlation Between Cabral Gold and Westward Gold
Can any of the company-specific risk be diversified away by investing in both Cabral 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 Cabral 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 Cabral Gold and Westward Gold, you can compare the effects of market volatilities on Cabral 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 Cabral Gold with a short position of Westward Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cabral Gold and Westward Gold.
Diversification Opportunities for Cabral Gold and Westward Gold
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Cabral and Westward is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Cabral Gold and Westward Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Westward Gold and Cabral 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 Cabral Gold 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 Cabral Gold i.e., Cabral Gold and Westward Gold go up and down completely randomly.
Pair Corralation between Cabral Gold and Westward Gold
Assuming the 90 days horizon Cabral Gold is expected to generate 1.07 times more return on investment than Westward Gold. However, Cabral Gold is 1.07 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 0.13 per unit of risk. If you would invest 13.00 in Cabral Gold on October 23, 2024 and sell it today you would earn a total of 6.00 from holding Cabral Gold or generate 46.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 94.74% |
| Values | Daily Returns |
Cabral Gold vs. Westward Gold
Performance |
| Timeline |
| Cabral Gold |
| Westward Gold |
Cabral Gold and Westward Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cabral Gold and Westward Gold
The main advantage of trading using opposite Cabral Gold and Westward Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cabral 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.| Cabral Gold vs. Puma Exploration | Cabral Gold vs. Endurance Gold | Cabral Gold vs. Red Pine Exploration | Cabral Gold vs. Fremont Gold |
| 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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