Correlation Between Westaim Corp and ProAm Explorations
Can any of the company-specific risk be diversified away by investing in both Westaim Corp and ProAm Explorations 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 Westaim Corp and ProAm Explorations into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Westaim Corp and ProAm Explorations Corp, you can compare the effects of market volatilities on Westaim Corp and ProAm Explorations 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 Westaim Corp with a short position of ProAm Explorations. Check out your portfolio center. Please also check ongoing floating volatility patterns of Westaim Corp and ProAm Explorations.
Diversification Opportunities for Westaim Corp and ProAm Explorations
-0.23 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Westaim and ProAm is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Westaim Corp and ProAm Explorations Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ProAm Explorations Corp and Westaim Corp 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 Westaim Corp are associated (or correlated) with ProAm Explorations. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ProAm Explorations Corp has no effect on the direction of Westaim Corp i.e., Westaim Corp and ProAm Explorations go up and down completely randomly.
Pair Corralation between Westaim Corp and ProAm Explorations
Assuming the 90 days horizon Westaim Corp is expected to generate 0.21 times more return on investment than ProAm Explorations. However, Westaim Corp is 4.8 times less risky than ProAm Explorations. It trades about 0.11 of its potential returns per unit of risk. ProAm Explorations Corp is currently generating about 0.02 per unit of risk. If you would invest 405.00 in Westaim Corp on September 12, 2024 and sell it today you would earn a total of 119.00 from holding Westaim Corp or generate 29.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Westaim Corp vs. ProAm Explorations Corp
Performance |
| Timeline |
| Westaim Corp |
| ProAm Explorations Corp |
Westaim Corp and ProAm Explorations Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Westaim Corp and ProAm Explorations
The main advantage of trading using opposite Westaim Corp and ProAm Explorations positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Westaim Corp position performs unexpectedly, ProAm Explorations 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 ProAm Explorations will offset losses from the drop in ProAm Explorations' long position.| Westaim Corp vs. Pulse Seismic | Westaim Corp vs. Quarterhill | Westaim Corp vs. Kneat Inc | Westaim Corp vs. Trisura Group |
| ProAm Explorations vs. Enbridge Pref 5 | ProAm Explorations vs. Enbridge Pref 11 | ProAm Explorations vs. Enbridge Pref L | ProAm Explorations vs. E Split 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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