Correlation Between American Pacific and Wesdome Gold
Can any of the company-specific risk be diversified away by investing in both American Pacific 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 American Pacific and Wesdome Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American Pacific Mining and Wesdome Gold Mines, you can compare the effects of market volatilities on American Pacific 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 American Pacific with a short position of Wesdome Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Pacific and Wesdome Gold.
Diversification Opportunities for American Pacific and Wesdome Gold
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between American and Wesdome is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding American Pacific 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 American Pacific 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 American Pacific 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 American Pacific i.e., American Pacific and Wesdome Gold go up and down completely randomly.
Pair Corralation between American Pacific and Wesdome Gold
Assuming the 90 days horizon American Pacific Mining is expected to generate 4.06 times more return on investment than Wesdome Gold. However, American Pacific is 4.06 times more volatile than Wesdome Gold Mines. It trades about 0.32 of its potential returns per unit of risk. Wesdome Gold Mines is currently generating about 0.02 per unit of risk. If you would invest 9.27 in American Pacific Mining on September 2, 2024 and sell it today you would earn a total of 8.73 from holding American Pacific Mining or generate 94.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
American Pacific Mining vs. Wesdome Gold Mines
Performance |
| Timeline |
| American Pacific Mining |
| Wesdome Gold Mines |
American Pacific and Wesdome Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Pacific and Wesdome Gold
The main advantage of trading using opposite American Pacific and Wesdome Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Pacific 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.| American Pacific vs. Westward Gold | American Pacific vs. Heliostar Metals | American Pacific vs. Revival Gold | American Pacific vs. Cabral Gold |
| Wesdome Gold vs. South32 Limited | Wesdome Gold vs. NioCorp Developments Ltd | Wesdome Gold vs. HUMANA INC | Wesdome Gold vs. SCOR PK |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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