Correlation Between Wesdome Gold and Alamos Gold
Can any of the company-specific risk be diversified away by investing in both Wesdome Gold and Alamos 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 Wesdome Gold and Alamos Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Wesdome Gold Mines and Alamos Gold, you can compare the effects of market volatilities on Wesdome Gold and Alamos 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 Wesdome Gold with a short position of Alamos Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wesdome Gold and Alamos Gold.
Diversification Opportunities for Wesdome Gold and Alamos Gold
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Wesdome and Alamos is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Wesdome Gold Mines and Alamos Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alamos Gold and Wesdome 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 Wesdome Gold Mines are associated (or correlated) with Alamos Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alamos Gold has no effect on the direction of Wesdome Gold i.e., Wesdome Gold and Alamos Gold go up and down completely randomly.
Pair Corralation between Wesdome Gold and Alamos Gold
Assuming the 90 days trading horizon Wesdome Gold Mines is expected to generate 1.35 times more return on investment than Alamos Gold. However, Wesdome Gold is 1.35 times more volatile than Alamos Gold. It trades about 0.07 of its potential returns per unit of risk. Alamos Gold is currently generating about 0.08 per unit of risk. If you would invest 786.00 in Wesdome Gold Mines on September 1, 2024 and sell it today you would earn a total of 437.00 from holding Wesdome Gold Mines or generate 55.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Wesdome Gold Mines vs. Alamos Gold
Performance |
| Timeline |
| Wesdome Gold Mines |
| Alamos Gold |
Wesdome Gold and Alamos Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wesdome Gold and Alamos Gold
The main advantage of trading using opposite Wesdome Gold and Alamos Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wesdome Gold position performs unexpectedly, Alamos 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 Alamos Gold will offset losses from the drop in Alamos Gold's long position.| Wesdome Gold vs. OceanaGold | Wesdome Gold vs. Torex Gold Resources | Wesdome Gold vs. Alamos Gold | Wesdome Gold vs. Dundee Precious Metals |
| Alamos Gold vs. Data Communications Management | Alamos Gold vs. Canlan Ice Sports | Alamos Gold vs. Cogeco Communications | Alamos Gold vs. TGS Esports |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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