Correlation Between Hummingbird Resources and West Vault
Can any of the company-specific risk be diversified away by investing in both Hummingbird Resources 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 Hummingbird Resources and West Vault into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hummingbird Resources PLC and West Vault Mining, you can compare the effects of market volatilities on Hummingbird Resources 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 Hummingbird Resources with a short position of West Vault. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hummingbird Resources and West Vault.
Diversification Opportunities for Hummingbird Resources and West Vault
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Hummingbird and West is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Hummingbird Resources PLC 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 Hummingbird Resources 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 Hummingbird Resources PLC 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 Hummingbird Resources i.e., Hummingbird Resources and West Vault go up and down completely randomly.
Pair Corralation between Hummingbird Resources and West Vault
Assuming the 90 days horizon Hummingbird Resources PLC is expected to under-perform the West Vault. In addition to that, Hummingbird Resources is 1.74 times more volatile than West Vault Mining. It trades about -0.02 of its total potential returns per unit of risk. West Vault Mining is currently generating about 0.05 per unit of volatility. If you would invest 74.00 in West Vault Mining on November 28, 2024 and sell it today you would earn a total of 2.00 from holding West Vault Mining or generate 2.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hummingbird Resources PLC vs. West Vault Mining
Performance |
| Timeline |
| Hummingbird Resources PLC |
| West Vault Mining |
Hummingbird Resources and West Vault Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hummingbird Resources and West Vault
The main advantage of trading using opposite Hummingbird Resources and West Vault positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hummingbird Resources 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.| Hummingbird Resources vs. Norsemont Mining | Hummingbird Resources vs. Tudor Gold Corp | Hummingbird Resources vs. Japan Gold Corp | Hummingbird Resources vs. Robex Resources |
| 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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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