Correlation Between West Mining and Voltage Metals
Can any of the company-specific risk be diversified away by investing in both West Mining and Voltage Metals 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 West Mining and Voltage Metals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between West Mining Corp and Voltage Metals Corp, you can compare the effects of market volatilities on West Mining and Voltage Metals 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 West Mining with a short position of Voltage Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of West Mining and Voltage Metals.
Diversification Opportunities for West Mining and Voltage Metals
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between West and Voltage is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding West Mining Corp and Voltage Metals Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Voltage Metals Corp and West Mining 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 West Mining Corp are associated (or correlated) with Voltage Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Voltage Metals Corp has no effect on the direction of West Mining i.e., West Mining and Voltage Metals go up and down completely randomly.
Pair Corralation between West Mining and Voltage Metals
Assuming the 90 days horizon West Mining Corp is expected to generate 1.17 times more return on investment than Voltage Metals. However, West Mining is 1.17 times more volatile than Voltage Metals Corp. It trades about -0.02 of its potential returns per unit of risk. Voltage Metals Corp is currently generating about -0.12 per unit of risk. If you would invest 14.00 in West Mining Corp on October 26, 2024 and sell it today you would lose (5.00) from holding West Mining Corp or give up 35.71% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 98.31% |
| Values | Daily Returns |
West Mining Corp vs. Voltage Metals Corp
Performance |
| Timeline |
| West Mining Corp |
| Voltage Metals Corp |
West Mining and Voltage Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with West Mining and Voltage Metals
The main advantage of trading using opposite West Mining and Voltage Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if West Mining position performs unexpectedly, Voltage Metals 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 Voltage Metals will offset losses from the drop in Voltage Metals' long position.| West Mining vs. Atomic Minerals | West Mining vs. Mundoro Capital | West Mining vs. E79 Resources Corp | West Mining vs. Norra Metals Corp |
| Voltage Metals vs. Norra Metals Corp | Voltage Metals vs. E79 Resources Corp | Voltage Metals vs. Cantex Mine Development | Voltage Metals vs. Amarc 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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