Correlation Between Wesdome Gold and Baru Gold
Can any of the company-specific risk be diversified away by investing in both Wesdome Gold and Baru 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 Baru 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 Baru Gold Corp, you can compare the effects of market volatilities on Wesdome Gold and Baru 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 Baru Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wesdome Gold and Baru Gold.
Diversification Opportunities for Wesdome Gold and Baru Gold
-0.27 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Wesdome and Baru is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Wesdome Gold Mines and Baru Gold Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Baru Gold Corp 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 Baru Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Baru Gold Corp has no effect on the direction of Wesdome Gold i.e., Wesdome Gold and Baru Gold go up and down completely randomly.
Pair Corralation between Wesdome Gold and Baru Gold
Assuming the 90 days horizon Wesdome Gold is expected to generate 3.9 times less return on investment than Baru Gold. But when comparing it to its historical volatility, Wesdome Gold Mines is 3.88 times less risky than Baru Gold. It trades about 0.07 of its potential returns per unit of risk. Baru Gold Corp is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 1.40 in Baru Gold Corp on August 26, 2024 and sell it today you would earn a total of 1.31 from holding Baru Gold Corp or generate 93.57% 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. Baru Gold Corp
Performance |
| Timeline |
| Wesdome Gold Mines |
| Baru Gold Corp |
Wesdome Gold and Baru Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wesdome Gold and Baru Gold
The main advantage of trading using opposite Wesdome Gold and Baru Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wesdome Gold position performs unexpectedly, Baru 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 Baru Gold will offset losses from the drop in Baru Gold's long position.| Wesdome Gold vs. Ascendant Resources | Wesdome Gold vs. Cantex Mine Development | Wesdome Gold vs. Amarc Resources | Wesdome Gold vs. Sterling Metals Corp |
| Baru Gold vs. Aurion Resources | Baru Gold vs. Liberty Gold Corp | Baru Gold vs. Orezone Gold Corp | Baru Gold vs. Radisson Mining 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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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