Correlation Between Wesdome Gold and Platinum Group
Can any of the company-specific risk be diversified away by investing in both Wesdome Gold and Platinum Group 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 Platinum Group 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 Platinum Group Metals, you can compare the effects of market volatilities on Wesdome Gold and Platinum Group 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 Platinum Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wesdome Gold and Platinum Group.
Diversification Opportunities for Wesdome Gold and Platinum Group
-0.22 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Wesdome and Platinum is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding Wesdome Gold Mines and Platinum Group Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Platinum Group Metals 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 Platinum Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Platinum Group Metals has no effect on the direction of Wesdome Gold i.e., Wesdome Gold and Platinum Group go up and down completely randomly.
Pair Corralation between Wesdome Gold and Platinum Group
Assuming the 90 days trading horizon Wesdome Gold Mines is expected to generate 0.67 times more return on investment than Platinum Group. However, Wesdome Gold Mines is 1.5 times less risky than Platinum Group. It trades about 0.02 of its potential returns per unit of risk. Platinum Group Metals is currently generating about -0.05 per unit of risk. If you would invest 1,220 in Wesdome Gold Mines on September 1, 2024 and sell it today you would earn a total of 3.00 from holding Wesdome Gold Mines or generate 0.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Wesdome Gold Mines vs. Platinum Group Metals
Performance |
| Timeline |
| Wesdome Gold Mines |
| Platinum Group Metals |
Wesdome Gold and Platinum Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wesdome Gold and Platinum Group
The main advantage of trading using opposite Wesdome Gold and Platinum Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wesdome Gold position performs unexpectedly, Platinum Group 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 Platinum Group will offset losses from the drop in Platinum Group's long position.| Wesdome Gold vs. OceanaGold | Wesdome Gold vs. Torex Gold Resources | Wesdome Gold vs. Alamos Gold | Wesdome Gold vs. Dundee Precious Metals |
| Platinum Group vs. Eastern Platinum Limited | Platinum Group vs. Entree Resources | Platinum Group vs. Solitario Exploration Royalty | Platinum Group vs. Minco Silver |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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