Correlation Between Wesdome Gold and Cassiar Gold
Can any of the company-specific risk be diversified away by investing in both Wesdome Gold and Cassiar 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 Cassiar 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 Cassiar Gold Corp, you can compare the effects of market volatilities on Wesdome Gold and Cassiar 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 Cassiar Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wesdome Gold and Cassiar Gold.
Diversification Opportunities for Wesdome Gold and Cassiar Gold
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Wesdome and Cassiar is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Wesdome Gold Mines and Cassiar Gold Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cassiar 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 Cassiar Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cassiar Gold Corp has no effect on the direction of Wesdome Gold i.e., Wesdome Gold and Cassiar Gold go up and down completely randomly.
Pair Corralation between Wesdome Gold and Cassiar Gold
Assuming the 90 days horizon Wesdome Gold Mines is expected to generate 0.44 times more return on investment than Cassiar Gold. However, Wesdome Gold Mines is 2.27 times less risky than Cassiar Gold. It trades about 0.6 of its potential returns per unit of risk. Cassiar Gold Corp is currently generating about -0.05 per unit of risk. If you would invest 798.00 in Wesdome Gold Mines on September 14, 2024 and sell it today you would earn a total of 217.00 from holding Wesdome Gold Mines or generate 27.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Wesdome Gold Mines vs. Cassiar Gold Corp
Performance |
| Timeline |
| Wesdome Gold Mines |
| Cassiar Gold Corp |
Wesdome Gold and Cassiar Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wesdome Gold and Cassiar Gold
The main advantage of trading using opposite Wesdome Gold and Cassiar Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wesdome Gold position performs unexpectedly, Cassiar 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 Cassiar Gold will offset losses from the drop in Cassiar Gold's 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 |
| Cassiar Gold vs. Independence Gold Corp | Cassiar Gold vs. Westward Gold | Cassiar Gold vs. Cabral Gold | Cassiar Gold vs. Revival 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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