Correlation Between US GoldMining and WT Offshore
Can any of the company-specific risk be diversified away by investing in both US GoldMining and WT Offshore 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 US GoldMining and WT Offshore into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between US GoldMining Warrant and WT Offshore, you can compare the effects of market volatilities on US GoldMining and WT Offshore 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 US GoldMining with a short position of WT Offshore. Check out your portfolio center. Please also check ongoing floating volatility patterns of US GoldMining and WT Offshore.
Diversification Opportunities for US GoldMining and WT Offshore
-0.17 | Correlation Coefficient |
Good diversification
The 3 months correlation between USGOW and WTI is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding US GoldMining Warrant and WT Offshore in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WT Offshore and US GoldMining 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 US GoldMining Warrant are associated (or correlated) with WT Offshore. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WT Offshore has no effect on the direction of US GoldMining i.e., US GoldMining and WT Offshore go up and down completely randomly.
Pair Corralation between US GoldMining and WT Offshore
Assuming the 90 days horizon US GoldMining Warrant is expected to generate 4.91 times more return on investment than WT Offshore. However, US GoldMining is 4.91 times more volatile than WT Offshore. It trades about 0.07 of its potential returns per unit of risk. WT Offshore is currently generating about -0.11 per unit of risk. If you would invest 185.00 in US GoldMining Warrant on September 13, 2024 and sell it today you would earn a total of 3.00 from holding US GoldMining Warrant or generate 1.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
US GoldMining Warrant vs. WT Offshore
Performance |
| Timeline |
| US GoldMining Warrant |
| WT Offshore |
US GoldMining and WT Offshore Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with US GoldMining and WT Offshore
The main advantage of trading using opposite US GoldMining and WT Offshore positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if US GoldMining position performs unexpectedly, WT Offshore 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 WT Offshore will offset losses from the drop in WT Offshore's long position.| US GoldMining vs. MP Materials Corp | US GoldMining vs. NioCorp Developments Ltd | US GoldMining vs. Vale SA ADR | US GoldMining vs. Vizsla Resources Corp |
| WT Offshore vs. Evolution Petroleum | WT Offshore vs. Ring Energy | WT Offshore vs. Gran Tierra Energy | WT Offshore vs. Permian Resources |
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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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