Correlation Between Mayfair Gold and Western Union
Can any of the company-specific risk be diversified away by investing in both Mayfair Gold and Western Union 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 Mayfair Gold and Western Union into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mayfair Gold Corp and Western Union Co, you can compare the effects of market volatilities on Mayfair Gold and Western Union 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 Mayfair Gold with a short position of Western Union. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mayfair Gold and Western Union.
Diversification Opportunities for Mayfair Gold and Western Union
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Mayfair and Western is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Mayfair Gold Corp and Western Union Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Western Union and Mayfair 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 Mayfair Gold Corp are associated (or correlated) with Western Union. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Western Union has no effect on the direction of Mayfair Gold i.e., Mayfair Gold and Western Union go up and down completely randomly.
Pair Corralation between Mayfair Gold and Western Union
Assuming the 90 days horizon Mayfair Gold Corp is expected to under-perform the Western Union. In addition to that, Mayfair Gold is 1.98 times more volatile than Western Union Co. It trades about -0.02 of its total potential returns per unit of risk. Western Union Co is currently generating about 0.0 per unit of volatility. If you would invest 1,099 in Western Union Co on September 4, 2024 and sell it today you would lose (10.00) from holding Western Union Co or give up 0.91% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mayfair Gold Corp vs. Western Union Co
Performance |
| Timeline |
| Mayfair Gold Corp |
| Western Union |
Mayfair Gold and Western Union Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mayfair Gold and Western Union
The main advantage of trading using opposite Mayfair Gold and Western Union positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mayfair Gold position performs unexpectedly, Western Union 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 Western Union will offset losses from the drop in Western Union's long position.| Mayfair Gold vs. Harmony Gold Mining | Mayfair Gold vs. SPACE | Mayfair Gold vs. T Rowe Price | Mayfair Gold vs. Ampleforth |
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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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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