Correlation Between Cabral Gold and West Vault
Can any of the company-specific risk be diversified away by investing in both Cabral Gold and West Vault 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 West Vault into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cabral Gold and West Vault Mining, you can compare the effects of market volatilities on Cabral Gold and West Vault 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 West Vault. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cabral Gold and West Vault.
Diversification Opportunities for Cabral Gold and West Vault
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Cabral and West is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Cabral Gold and West Vault Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on West Vault Mining 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 West Vault. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of West Vault Mining has no effect on the direction of Cabral Gold i.e., Cabral Gold and West Vault go up and down completely randomly.
Pair Corralation between Cabral Gold and West Vault
Assuming the 90 days horizon Cabral Gold is expected to generate 1.58 times more return on investment than West Vault. However, Cabral Gold is 1.58 times more volatile than West Vault Mining. It trades about 0.11 of its potential returns per unit of risk. West Vault Mining is currently generating about 0.05 per unit of risk. If you would invest 16.00 in Cabral Gold on November 28, 2024 and sell it today you would earn a total of 2.00 from holding Cabral Gold or generate 12.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cabral Gold vs. West Vault Mining
Performance |
| Timeline |
| Cabral Gold |
| West Vault Mining |
Cabral Gold and West Vault Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cabral Gold and West Vault
The main advantage of trading using opposite Cabral Gold and West Vault positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cabral Gold position performs unexpectedly, West Vault 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 West Vault will offset losses from the drop in West Vault's long position.| Cabral Gold vs. Puma Exploration | Cabral Gold vs. Endurance Gold | Cabral Gold vs. Red Pine Exploration | Cabral Gold vs. Falcon Gold Corp |
| West Vault vs. Aurelius Minerals | West Vault vs. Quebec Precious Metals | West Vault vs. Omineca Mining and | West Vault vs. Altamira 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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