Correlation Between Wesdome Gold and Ophir Gold
Can any of the company-specific risk be diversified away by investing in both Wesdome Gold and Ophir 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 Ophir 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 Ophir Gold Corp, you can compare the effects of market volatilities on Wesdome Gold and Ophir 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 Ophir Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wesdome Gold and Ophir Gold.
Diversification Opportunities for Wesdome Gold and Ophir Gold
-0.74 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Wesdome and Ophir is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding Wesdome Gold Mines and Ophir Gold Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ophir 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 Ophir Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ophir Gold Corp has no effect on the direction of Wesdome Gold i.e., Wesdome Gold and Ophir Gold go up and down completely randomly.
Pair Corralation between Wesdome Gold and Ophir Gold
Assuming the 90 days horizon Wesdome Gold is expected to generate 12.09 times less return on investment than Ophir Gold. But when comparing it to its historical volatility, Wesdome Gold Mines is 3.09 times less risky than Ophir Gold. It trades about 0.04 of its potential returns per unit of risk. Ophir Gold Corp is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 9.04 in Ophir Gold Corp on August 30, 2024 and sell it today you would earn a total of 29.96 from holding Ophir Gold Corp or generate 331.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 31.11% |
| Values | Daily Returns |
Wesdome Gold Mines vs. Ophir Gold Corp
Performance |
| Timeline |
| Wesdome Gold Mines |
| Ophir Gold Corp |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Wesdome Gold and Ophir Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wesdome Gold and Ophir Gold
The main advantage of trading using opposite Wesdome Gold and Ophir Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wesdome Gold position performs unexpectedly, Ophir 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 Ophir Gold will offset losses from the drop in Ophir 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 |
| Ophir Gold vs. White Gold Corp | Ophir Gold vs. Puma Exploration | Ophir Gold vs. Endurance Gold | Ophir Gold vs. Red Pine Exploration |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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