Correlation Between Aura Minerals and Wesdome Gold
Can any of the company-specific risk be diversified away by investing in both Aura Minerals 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 Aura Minerals and Wesdome Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aura Minerals and Wesdome Gold Mines, you can compare the effects of market volatilities on Aura Minerals 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 Aura Minerals with a short position of Wesdome Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aura Minerals and Wesdome Gold.
Diversification Opportunities for Aura Minerals and Wesdome Gold
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Aura and Wesdome is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Aura Minerals 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 Aura Minerals 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 Aura Minerals 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 Aura Minerals i.e., Aura Minerals and Wesdome Gold go up and down completely randomly.
Pair Corralation between Aura Minerals and Wesdome Gold
Assuming the 90 days trading horizon Aura Minerals is expected to generate 0.93 times more return on investment than Wesdome Gold. However, Aura Minerals is 1.08 times less risky than Wesdome Gold. It trades about 0.07 of its potential returns per unit of risk. Wesdome Gold Mines is currently generating about 0.04 per unit of risk. If you would invest 1,008 in Aura Minerals on August 26, 2024 and sell it today you would earn a total of 772.00 from holding Aura Minerals or generate 76.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aura Minerals vs. Wesdome Gold Mines
Performance |
| Timeline |
| Aura Minerals |
| Wesdome Gold Mines |
Aura Minerals and Wesdome Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aura Minerals and Wesdome Gold
The main advantage of trading using opposite Aura Minerals and Wesdome Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aura Minerals 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.| Aura Minerals vs. First Majestic Silver | Aura Minerals vs. Ivanhoe Energy | Aura Minerals vs. Orezone Gold Corp | Aura Minerals vs. Faraday Copper Corp |
| 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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