Correlation Between Westward Gold and Bluestone Resources
Can any of the company-specific risk be diversified away by investing in both Westward Gold and Bluestone Resources 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 Westward Gold and Bluestone Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Westward Gold and Bluestone Resources, you can compare the effects of market volatilities on Westward Gold and Bluestone Resources 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 Westward Gold with a short position of Bluestone Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Westward Gold and Bluestone Resources.
Diversification Opportunities for Westward Gold and Bluestone Resources
0.05 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Westward and Bluestone is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Westward Gold and Bluestone Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bluestone Resources and Westward 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 Westward Gold are associated (or correlated) with Bluestone Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bluestone Resources has no effect on the direction of Westward Gold i.e., Westward Gold and Bluestone Resources go up and down completely randomly.
Pair Corralation between Westward Gold and Bluestone Resources
Assuming the 90 days horizon Westward Gold is expected to generate 3.77 times more return on investment than Bluestone Resources. However, Westward Gold is 3.77 times more volatile than Bluestone Resources. It trades about 0.06 of its potential returns per unit of risk. Bluestone Resources is currently generating about 0.01 per unit of risk. If you would invest 5.64 in Westward Gold on September 19, 2024 and sell it today you would earn a total of 0.14 from holding Westward Gold or generate 2.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Westward Gold vs. Bluestone Resources
Performance |
| Timeline |
| Westward Gold |
| Bluestone Resources |
Westward Gold and Bluestone Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Westward Gold and Bluestone Resources
The main advantage of trading using opposite Westward Gold and Bluestone Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Westward Gold position performs unexpectedly, Bluestone Resources 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 Bluestone Resources will offset losses from the drop in Bluestone Resources' long position.| Westward Gold vs. Heliostar Metals | Westward Gold vs. Revival Gold | Westward Gold vs. Cabral Gold | Westward Gold vs. Cassiar Gold Corp |
| Bluestone Resources vs. Qubec Nickel Corp | Bluestone Resources vs. IGO Limited | Bluestone Resources vs. Focus Graphite | Bluestone Resources vs. Anson Resources Limited |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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