Correlation Between Wesdome Gold and Lion One
Can any of the company-specific risk be diversified away by investing in both Wesdome Gold and Lion One 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 Lion One 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 Lion One Metals, you can compare the effects of market volatilities on Wesdome Gold and Lion One 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 Lion One. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wesdome Gold and Lion One.
Diversification Opportunities for Wesdome Gold and Lion One
0.1 | Correlation Coefficient |
Average diversification
The 3 months correlation between Wesdome and Lion is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Wesdome Gold Mines and Lion One Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lion One Metals 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 Lion One. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lion One Metals has no effect on the direction of Wesdome Gold i.e., Wesdome Gold and Lion One go up and down completely randomly.
Pair Corralation between Wesdome Gold and Lion One
Assuming the 90 days horizon Wesdome Gold Mines is expected to generate 0.76 times more return on investment than Lion One. However, Wesdome Gold Mines is 1.32 times less risky than Lion One. It trades about 0.04 of its potential returns per unit of risk. Lion One Metals is currently generating about -0.05 per unit of risk. If you would invest 567.00 in Wesdome Gold Mines on September 24, 2024 and sell it today you would earn a total of 316.00 from holding Wesdome Gold Mines or generate 55.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Wesdome Gold Mines vs. Lion One Metals
Performance |
| Timeline |
| Wesdome Gold Mines |
| Lion One Metals |
Wesdome Gold and Lion One Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wesdome Gold and Lion One
The main advantage of trading using opposite Wesdome Gold and Lion One positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wesdome Gold position performs unexpectedly, Lion One 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 Lion One will offset losses from the drop in Lion One's long position.| Wesdome Gold vs. Puma Exploration | Wesdome Gold vs. Sixty North Gold | Wesdome Gold vs. Red Pine Exploration | Wesdome Gold vs. Altamira Gold Corp |
| Lion One vs. Puma Exploration | Lion One vs. Sixty North Gold | Lion One vs. Red Pine Exploration | Lion One vs. Altamira Gold 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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