Correlation Between Wesdome Gold and GoldMoney
Can any of the company-specific risk be diversified away by investing in both Wesdome Gold and GoldMoney 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 GoldMoney 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 GoldMoney, you can compare the effects of market volatilities on Wesdome Gold and GoldMoney 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 GoldMoney. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wesdome Gold and GoldMoney.
Diversification Opportunities for Wesdome Gold and GoldMoney
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Wesdome and GoldMoney is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Wesdome Gold Mines and GoldMoney in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GoldMoney 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 GoldMoney. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GoldMoney has no effect on the direction of Wesdome Gold i.e., Wesdome Gold and GoldMoney go up and down completely randomly.
Pair Corralation between Wesdome Gold and GoldMoney
Assuming the 90 days trading horizon Wesdome Gold is expected to generate 1.53 times less return on investment than GoldMoney. In addition to that, Wesdome Gold is 1.79 times more volatile than GoldMoney. It trades about 0.14 of its total potential returns per unit of risk. GoldMoney is currently generating about 0.37 per unit of volatility. If you would invest 535.00 in GoldMoney on November 3, 2024 and sell it today you would earn a total of 55.00 from holding GoldMoney or generate 10.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 91.3% |
| Values | Daily Returns |
Wesdome Gold Mines vs. GoldMoney
Performance |
| Timeline |
| Wesdome Gold Mines |
| GoldMoney |
Wesdome Gold and GoldMoney Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wesdome Gold and GoldMoney
The main advantage of trading using opposite Wesdome Gold and GoldMoney positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wesdome Gold position performs unexpectedly, GoldMoney 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 GoldMoney will offset losses from the drop in GoldMoney's long position.| Wesdome Gold vs. OceanaGold | Wesdome Gold vs. Torex Gold Resources | Wesdome Gold vs. Alamos Gold | Wesdome Gold vs. Dundee Precious Metals |
| GoldMoney vs. GoldMoney | GoldMoney vs. Mene Inc | GoldMoney vs. North Peak Resources | GoldMoney vs. First Mining Gold |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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