Correlation Between Dacian Gold and Westward Gold
Can any of the company-specific risk be diversified away by investing in both Dacian 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 Dacian 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 Dacian Gold Limited and Westward Gold, you can compare the effects of market volatilities on Dacian 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 Dacian Gold with a short position of Westward Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dacian Gold and Westward Gold.
Diversification Opportunities for Dacian Gold and Westward Gold
-0.04 | Correlation Coefficient |
Good diversification
The 3 months correlation between Dacian and Westward is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Dacian Gold Limited and Westward Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Westward Gold and Dacian 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 Dacian Gold Limited 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 Dacian Gold i.e., Dacian Gold and Westward Gold go up and down completely randomly.
Pair Corralation between Dacian Gold and Westward Gold
If you would invest 5.34 in Westward Gold on October 23, 2024 and sell it today you would earn a total of 0.67 from holding Westward Gold or generate 12.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 5.26% |
| Values | Daily Returns |
Dacian Gold Limited vs. Westward Gold
Performance |
| Timeline |
| Dacian Gold Limited |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Westward Gold |
Dacian Gold and Westward Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dacian Gold and Westward Gold
The main advantage of trading using opposite Dacian Gold and Westward Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dacian 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.| Dacian Gold vs. Minnova Corp | Dacian Gold vs. Argo Gold | Dacian Gold vs. Advance Gold Corp | Dacian Gold vs. Blue Star 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 Correlations module to find global opportunities by holding instruments from different markets.
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