Correlation Between Independence Gold and Westward Gold
Can any of the company-specific risk be diversified away by investing in both Independence 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 Independence 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 Independence Gold Corp and Westward Gold, you can compare the effects of market volatilities on Independence 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 Independence Gold with a short position of Westward Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Independence Gold and Westward Gold.
Diversification Opportunities for Independence Gold and Westward Gold
-0.06 | Correlation Coefficient |
Good diversification
The 3 months correlation between Independence and Westward is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding Independence Gold Corp and Westward Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Westward Gold and Independence 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 Independence Gold Corp 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 Independence Gold i.e., Independence Gold and Westward Gold go up and down completely randomly.
Pair Corralation between Independence Gold and Westward Gold
Assuming the 90 days horizon Independence Gold is expected to generate 6.88 times less return on investment than Westward Gold. But when comparing it to its historical volatility, Independence Gold Corp is 1.17 times less risky than Westward Gold. It trades about 0.02 of its potential returns per unit of risk. Westward Gold is currently generating about 0.13 of returns per unit of risk over similar time horizon. 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 | 94.74% |
| Values | Daily Returns |
Independence Gold Corp vs. Westward Gold
Performance |
| Timeline |
| Independence Gold Corp |
| Westward Gold |
Independence Gold and Westward Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Independence Gold and Westward Gold
The main advantage of trading using opposite Independence Gold and Westward Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Independence 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.| Independence Gold vs. Heliostar Metals | Independence Gold vs. Revival Gold | Independence Gold vs. Cabral Gold | Independence Gold vs. Cassiar Gold Corp |
| 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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