Correlation Between Wesdome Gold and Japan Gold
Can any of the company-specific risk be diversified away by investing in both Wesdome Gold and Japan 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 Japan 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 Japan Gold Corp, you can compare the effects of market volatilities on Wesdome Gold and Japan 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 Japan Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wesdome Gold and Japan Gold.
Diversification Opportunities for Wesdome Gold and Japan Gold
-0.2 | Correlation Coefficient |
Good diversification
The 3 months correlation between Wesdome and Japan is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding Wesdome Gold Mines and Japan Gold Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Japan 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 Japan Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Japan Gold Corp has no effect on the direction of Wesdome Gold i.e., Wesdome Gold and Japan Gold go up and down completely randomly.
Pair Corralation between Wesdome Gold and Japan Gold
Assuming the 90 days horizon Wesdome Gold Mines is expected to generate 0.42 times more return on investment than Japan Gold. However, Wesdome Gold Mines is 2.37 times less risky than Japan Gold. It trades about 0.06 of its potential returns per unit of risk. Japan Gold Corp is currently generating about 0.0 per unit of risk. If you would invest 546.00 in Wesdome Gold Mines on September 1, 2024 and sell it today you would earn a total of 330.00 from holding Wesdome Gold Mines or generate 60.44% 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. Japan Gold Corp
Performance |
| Timeline |
| Wesdome Gold Mines |
| Japan Gold Corp |
Wesdome Gold and Japan Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wesdome Gold and Japan Gold
The main advantage of trading using opposite Wesdome Gold and Japan Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wesdome Gold position performs unexpectedly, Japan 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 Japan Gold will offset losses from the drop in Japan Gold's long position.| Wesdome Gold vs. South32 Limited | Wesdome Gold vs. NioCorp Developments Ltd | Wesdome Gold vs. HUMANA INC | Wesdome Gold vs. SCOR PK |
| Japan Gold vs. Aurion Resources | Japan Gold vs. Rio2 Limited | Japan Gold vs. Palamina Corp | Japan Gold vs. BTU Metals Corp |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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