Correlation Between MAS Gold and Wildsky Resources
Can any of the company-specific risk be diversified away by investing in both MAS Gold and Wildsky Resources 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 MAS Gold and Wildsky Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MAS Gold Corp and Wildsky Resources, you can compare the effects of market volatilities on MAS Gold and Wildsky Resources 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 MAS Gold with a short position of Wildsky Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of MAS Gold and Wildsky Resources.
Diversification Opportunities for MAS Gold and Wildsky Resources
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between MAS and Wildsky is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding MAS Gold Corp and Wildsky Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wildsky Resources and MAS 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 MAS Gold Corp are associated (or correlated) with Wildsky Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wildsky Resources has no effect on the direction of MAS Gold i.e., MAS Gold and Wildsky Resources go up and down completely randomly.
Pair Corralation between MAS Gold and Wildsky Resources
Assuming the 90 days horizon MAS Gold Corp is expected to generate 2.99 times more return on investment than Wildsky Resources. However, MAS Gold is 2.99 times more volatile than Wildsky Resources. It trades about 0.07 of its potential returns per unit of risk. Wildsky Resources is currently generating about 0.01 per unit of risk. If you would invest 2.67 in MAS Gold Corp on September 2, 2024 and sell it today you would lose (1.17) from holding MAS Gold Corp or give up 43.82% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.8% |
| Values | Daily Returns |
MAS Gold Corp vs. Wildsky Resources
Performance |
| Timeline |
| MAS Gold Corp |
| Wildsky Resources |
MAS Gold and Wildsky Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MAS Gold and Wildsky Resources
The main advantage of trading using opposite MAS Gold and Wildsky Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MAS Gold position performs unexpectedly, Wildsky Resources 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 Wildsky Resources will offset losses from the drop in Wildsky Resources' long position.The idea behind MAS Gold Corp and Wildsky Resources pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Wildsky Resources vs. First Majestic Silver | Wildsky Resources vs. Ivanhoe Energy | Wildsky Resources vs. Orezone 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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