Correlation Between GoldMining and White Gold
Can any of the company-specific risk be diversified away by investing in both GoldMining and White 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 GoldMining and White Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GoldMining and White Gold Corp, you can compare the effects of market volatilities on GoldMining and White 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 GoldMining with a short position of White Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of GoldMining and White Gold.
Diversification Opportunities for GoldMining and White Gold
0.42 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between GoldMining and White is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding GoldMining and White Gold Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on White Gold Corp and GoldMining 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 GoldMining are associated (or correlated) with White Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of White Gold Corp has no effect on the direction of GoldMining i.e., GoldMining and White Gold go up and down completely randomly.
Pair Corralation between GoldMining and White Gold
Assuming the 90 days trading horizon GoldMining is expected to generate 0.52 times more return on investment than White Gold. However, GoldMining is 1.92 times less risky than White Gold. It trades about -0.05 of its potential returns per unit of risk. White Gold Corp is currently generating about -0.08 per unit of risk. If you would invest 130.00 in GoldMining on August 31, 2024 and sell it today you would lose (5.00) from holding GoldMining or give up 3.85% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
GoldMining vs. White Gold Corp
Performance |
| Timeline |
| GoldMining |
| White Gold Corp |
GoldMining and White Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GoldMining and White Gold
The main advantage of trading using opposite GoldMining and White Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GoldMining position performs unexpectedly, White 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 White Gold will offset losses from the drop in White Gold's long position.| GoldMining vs. First Mining Gold | GoldMining vs. Liberty Gold Corp | GoldMining vs. Equinox Gold Corp | GoldMining vs. SilverCrest Metals |
| White Gold vs. Sokoman Minerals Corp | White Gold vs. Royal Road Minerals | White Gold vs. Labrador 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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