Correlation Between Wesdome Gold and Almaden Minerals
Can any of the company-specific risk be diversified away by investing in both Wesdome Gold and Almaden Minerals 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 Almaden Minerals 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 Almaden Minerals, you can compare the effects of market volatilities on Wesdome Gold and Almaden Minerals 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 Almaden Minerals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wesdome Gold and Almaden Minerals.
Diversification Opportunities for Wesdome Gold and Almaden Minerals
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Wesdome and Almaden is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Wesdome Gold Mines and Almaden Minerals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Almaden Minerals 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 Almaden Minerals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Almaden Minerals has no effect on the direction of Wesdome Gold i.e., Wesdome Gold and Almaden Minerals go up and down completely randomly.
Pair Corralation between Wesdome Gold and Almaden Minerals
Assuming the 90 days horizon Wesdome Gold Mines is expected to generate 0.65 times more return on investment than Almaden Minerals. However, Wesdome Gold Mines is 1.54 times less risky than Almaden Minerals. It trades about 0.07 of its potential returns per unit of risk. Almaden Minerals is currently generating about -0.07 per unit of risk. If you would invest 469.00 in Wesdome Gold Mines on November 2, 2024 and sell it today you would earn a total of 536.00 from holding Wesdome Gold Mines or generate 114.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 22.67% |
| Values | Daily Returns |
Wesdome Gold Mines vs. Almaden Minerals
Performance |
| Timeline |
| Wesdome Gold Mines |
| Almaden Minerals |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Wesdome Gold and Almaden Minerals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wesdome Gold and Almaden Minerals
The main advantage of trading using opposite Wesdome Gold and Almaden Minerals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wesdome Gold position performs unexpectedly, Almaden Minerals 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 Almaden Minerals will offset losses from the drop in Almaden Minerals' long position.| Wesdome Gold vs. Victoria Gold Corp | Wesdome Gold vs. Cassiar Gold Corp | Wesdome Gold vs. Liberty Gold Corp | Wesdome Gold vs. I 80 Gold Corp |
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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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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