Correlation Between Labrador Gold and Westhaven Gold
Can any of the company-specific risk be diversified away by investing in both Labrador Gold and Westhaven 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 Labrador Gold and Westhaven Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Labrador Gold Corp and Westhaven Gold Corp, you can compare the effects of market volatilities on Labrador Gold and Westhaven 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 Labrador Gold with a short position of Westhaven Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Labrador Gold and Westhaven Gold.
Diversification Opportunities for Labrador Gold and Westhaven Gold
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Labrador and Westhaven is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Labrador Gold Corp and Westhaven Gold Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Westhaven Gold Corp and Labrador 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 Labrador Gold Corp are associated (or correlated) with Westhaven Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Westhaven Gold Corp has no effect on the direction of Labrador Gold i.e., Labrador Gold and Westhaven Gold go up and down completely randomly.
Pair Corralation between Labrador Gold and Westhaven Gold
Assuming the 90 days horizon Labrador Gold Corp is expected to generate 1.21 times more return on investment than Westhaven Gold. However, Labrador Gold is 1.21 times more volatile than Westhaven Gold Corp. It trades about -0.02 of its potential returns per unit of risk. Westhaven Gold Corp is currently generating about -0.02 per unit of risk. If you would invest 22.00 in Labrador Gold Corp on September 24, 2024 and sell it today you would lose (17.80) from holding Labrador Gold Corp or give up 80.91% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 99.8% |
| Values | Daily Returns |
Labrador Gold Corp vs. Westhaven Gold Corp
Performance |
| Timeline |
| Labrador Gold Corp |
| Westhaven Gold Corp |
Labrador Gold and Westhaven Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Labrador Gold and Westhaven Gold
The main advantage of trading using opposite Labrador Gold and Westhaven Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Labrador Gold position performs unexpectedly, Westhaven 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 Westhaven Gold will offset losses from the drop in Westhaven Gold's long position.| Labrador Gold vs. Lion One Metals | Labrador Gold vs. Westhaven Gold Corp | Labrador Gold vs. Satori Resources | Labrador Gold vs. Wesdome Gold Mines |
| Westhaven Gold vs. Puma Exploration | Westhaven Gold vs. Sixty North Gold | Westhaven Gold vs. Red Pine Exploration | Westhaven Gold 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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