Correlation Between Wesdome Gold and Radisson Mining
Can any of the company-specific risk be diversified away by investing in both Wesdome Gold and Radisson Mining 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 Radisson Mining 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 Radisson Mining Resources, you can compare the effects of market volatilities on Wesdome Gold and Radisson Mining 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 Radisson Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wesdome Gold and Radisson Mining.
Diversification Opportunities for Wesdome Gold and Radisson Mining
-0.15 | Correlation Coefficient |
Good diversification
The 3 months correlation between Wesdome and Radisson is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Wesdome Gold Mines and Radisson Mining Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Radisson Mining Resources 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 Radisson Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Radisson Mining Resources has no effect on the direction of Wesdome Gold i.e., Wesdome Gold and Radisson Mining go up and down completely randomly.
Pair Corralation between Wesdome Gold and Radisson Mining
Assuming the 90 days horizon Wesdome Gold is expected to generate 1.22 times less return on investment than Radisson Mining. But when comparing it to its historical volatility, Wesdome Gold Mines is 1.84 times less risky than Radisson Mining. It trades about 0.07 of its potential returns per unit of risk. Radisson Mining Resources is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 12.00 in Radisson Mining Resources on August 26, 2024 and sell it today you would earn a total of 5.00 from holding Radisson Mining Resources or generate 41.67% 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. Radisson Mining Resources
Performance |
| Timeline |
| Wesdome Gold Mines |
| Radisson Mining Resources |
Wesdome Gold and Radisson Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wesdome Gold and Radisson Mining
The main advantage of trading using opposite Wesdome Gold and Radisson Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wesdome Gold position performs unexpectedly, Radisson Mining 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 Radisson Mining will offset losses from the drop in Radisson Mining's long position.| Wesdome Gold vs. Ascendant Resources | Wesdome Gold vs. Cantex Mine Development | Wesdome Gold vs. Amarc Resources | Wesdome Gold vs. Sterling Metals Corp |
| Radisson Mining vs. Northern Superior Resources | Radisson Mining vs. American Pacific Mining | Radisson Mining vs. Arizona Metals Corp | Radisson Mining vs. Roscan 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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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