Correlation Between Wesdome Gold and Labrador Gold
Can any of the company-specific risk be diversified away by investing in both Wesdome Gold and Labrador 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 Labrador 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 Labrador Gold Corp, you can compare the effects of market volatilities on Wesdome Gold and Labrador 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 Labrador Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wesdome Gold and Labrador Gold.
Diversification Opportunities for Wesdome Gold and Labrador Gold
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Wesdome and Labrador is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Wesdome Gold Mines and Labrador Gold Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Labrador 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 Labrador Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Labrador Gold Corp has no effect on the direction of Wesdome Gold i.e., Wesdome Gold and Labrador Gold go up and down completely randomly.
Pair Corralation between Wesdome Gold and Labrador Gold
Assuming the 90 days horizon Wesdome Gold Mines is expected to generate 0.35 times more return on investment than Labrador Gold. However, Wesdome Gold Mines is 2.83 times less risky than Labrador Gold. It trades about 0.6 of its potential returns per unit of risk. Labrador Gold Corp is currently generating about -0.1 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 | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Wesdome Gold Mines vs. Labrador Gold Corp
Performance |
| Timeline |
| Wesdome Gold Mines |
| Labrador Gold Corp |
Wesdome Gold and Labrador Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wesdome Gold and Labrador Gold
The main advantage of trading using opposite Wesdome Gold and Labrador Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wesdome Gold position performs unexpectedly, Labrador 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 Labrador Gold will offset losses from the drop in Labrador 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 |
| Labrador Gold vs. Exploits Discovery Corp | Labrador Gold vs. Mako Mining Corp | Labrador Gold vs. Puma Exploration | Labrador Gold vs. Aurion 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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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