Correlation Between Orla Mining and Wesdome Gold
Can any of the company-specific risk be diversified away by investing in both Orla Mining 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 Orla Mining and Wesdome Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Orla Mining and Wesdome Gold Mines, you can compare the effects of market volatilities on Orla Mining 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 Orla Mining with a short position of Wesdome Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Orla Mining and Wesdome Gold.
Diversification Opportunities for Orla Mining and Wesdome Gold
0.03 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Orla and Wesdome is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Orla Mining 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 Orla Mining 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 Orla Mining 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 Orla Mining i.e., Orla Mining and Wesdome Gold go up and down completely randomly.
Pair Corralation between Orla Mining and Wesdome Gold
Assuming the 90 days trading horizon Orla Mining is expected to under-perform the Wesdome Gold. In addition to that, Orla Mining is 1.31 times more volatile than Wesdome Gold Mines. It trades about -0.11 of its total potential returns per unit of risk. Wesdome Gold Mines is currently generating about -0.11 per unit of volatility. If you would invest 1,303 in Wesdome Gold Mines on August 25, 2024 and sell it today you would lose (94.00) from holding Wesdome Gold Mines or give up 7.21% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Orla Mining vs. Wesdome Gold Mines
Performance |
| Timeline |
| Orla Mining |
| Wesdome Gold Mines |
Orla Mining and Wesdome Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Orla Mining and Wesdome Gold
The main advantage of trading using opposite Orla Mining and Wesdome Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Orla Mining 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.The idea behind Orla Mining and Wesdome Gold Mines 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.| Wesdome Gold vs. OceanaGold | Wesdome Gold vs. Torex Gold Resources | Wesdome Gold vs. Alamos Gold | Wesdome Gold vs. Dundee Precious Metals |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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