Correlation Between Lundin Gold and Wesdome Gold
Can any of the company-specific risk be diversified away by investing in both Lundin Gold and Wesdome 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 Lundin Gold and Wesdome Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lundin Gold and Wesdome Gold Mines, you can compare the effects of market volatilities on Lundin Gold and Wesdome 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 Lundin Gold with a short position of Wesdome Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lundin Gold and Wesdome Gold.
Diversification Opportunities for Lundin Gold and Wesdome Gold
-0.24 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Lundin and Wesdome is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding Lundin Gold and Wesdome Gold Mines in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wesdome Gold Mines and Lundin 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 Lundin Gold are associated (or correlated) with Wesdome Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wesdome Gold Mines has no effect on the direction of Lundin Gold i.e., Lundin Gold and Wesdome Gold go up and down completely randomly.
Pair Corralation between Lundin Gold and Wesdome Gold
Assuming the 90 days horizon Lundin Gold is expected to generate 0.83 times more return on investment than Wesdome Gold. However, Lundin Gold is 1.21 times less risky than Wesdome Gold. It trades about -0.08 of its potential returns per unit of risk. Wesdome Gold Mines is currently generating about -0.08 per unit of risk. If you would invest 2,462 in Lundin Gold on August 26, 2024 and sell it today you would lose (121.00) from holding Lundin Gold or give up 4.91% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lundin Gold vs. Wesdome Gold Mines
Performance |
| Timeline |
| Lundin Gold |
| Wesdome Gold Mines |
Lundin Gold and Wesdome Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lundin Gold and Wesdome Gold
The main advantage of trading using opposite Lundin Gold and Wesdome Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lundin Gold position performs unexpectedly, Wesdome 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 Wesdome Gold will offset losses from the drop in Wesdome Gold's long position.| Lundin Gold vs. Aurion Resources | Lundin Gold vs. Liberty Gold Corp | Lundin Gold vs. Orezone Gold Corp | Lundin Gold vs. Radisson Mining Resources |
| Wesdome Gold vs. Victoria Gold Corp | Wesdome Gold vs. Cassiar Gold Corp | Wesdome Gold vs. Liberty Gold Corp | Wesdome Gold vs. I 80 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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