Correlation Between G2 Goldfields and Westward Gold
Can any of the company-specific risk be diversified away by investing in both G2 Goldfields 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 G2 Goldfields and Westward Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between G2 Goldfields and Westward Gold, you can compare the effects of market volatilities on G2 Goldfields 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 G2 Goldfields with a short position of Westward Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of G2 Goldfields and Westward Gold.
Diversification Opportunities for G2 Goldfields and Westward Gold
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between GUYGF and Westward is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding G2 Goldfields and Westward Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Westward Gold and G2 Goldfields 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 G2 Goldfields 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 G2 Goldfields i.e., G2 Goldfields and Westward Gold go up and down completely randomly.
Pair Corralation between G2 Goldfields and Westward Gold
Assuming the 90 days horizon G2 Goldfields is expected to generate 0.46 times more return on investment than Westward Gold. However, G2 Goldfields is 2.16 times less risky than Westward Gold. It trades about 0.09 of its potential returns per unit of risk. Westward Gold is currently generating about 0.04 per unit of risk. If you would invest 48.00 in G2 Goldfields on August 30, 2024 and sell it today you would earn a total of 105.00 from holding G2 Goldfields or generate 218.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
G2 Goldfields vs. Westward Gold
Performance |
| Timeline |
| G2 Goldfields |
| Westward Gold |
G2 Goldfields and Westward Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with G2 Goldfields and Westward Gold
The main advantage of trading using opposite G2 Goldfields and Westward Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if G2 Goldfields 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.| G2 Goldfields vs. Vertiv Holdings Co | G2 Goldfields vs. Nasdaq Inc | G2 Goldfields vs. McDonalds | G2 Goldfields vs. Walmart |
| Westward Gold vs. Vertiv Holdings Co | Westward Gold vs. Nasdaq Inc | Westward Gold vs. McDonalds | Westward Gold vs. Walmart |
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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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