Correlation Between Westward Gold and Brunswick Exploration
Can any of the company-specific risk be diversified away by investing in both Westward Gold and Brunswick Exploration 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 Brunswick Exploration into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Westward Gold and Brunswick Exploration, you can compare the effects of market volatilities on Westward Gold and Brunswick Exploration 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 Brunswick Exploration. Check out your portfolio center. Please also check ongoing floating volatility patterns of Westward Gold and Brunswick Exploration.
Diversification Opportunities for Westward Gold and Brunswick Exploration
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Westward and Brunswick is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Westward Gold and Brunswick Exploration in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Brunswick Exploration 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 Brunswick Exploration. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Brunswick Exploration has no effect on the direction of Westward Gold i.e., Westward Gold and Brunswick Exploration go up and down completely randomly.
Pair Corralation between Westward Gold and Brunswick Exploration
Assuming the 90 days horizon Westward Gold is expected to generate 0.93 times more return on investment than Brunswick Exploration. However, Westward Gold is 1.07 times less risky than Brunswick Exploration. It trades about 0.13 of its potential returns per unit of risk. Brunswick Exploration is currently generating about -0.05 per unit of risk. If you would invest 5.36 in Westward Gold on October 25, 2024 and sell it today you would earn a total of 0.70 from holding Westward Gold or generate 13.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 94.74% |
| Values | Daily Returns |
Westward Gold vs. Brunswick Exploration
Performance |
| Timeline |
| Westward Gold |
| Brunswick Exploration |
Westward Gold and Brunswick Exploration Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Westward Gold and Brunswick Exploration
The main advantage of trading using opposite Westward Gold and Brunswick Exploration positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Westward Gold position performs unexpectedly, Brunswick Exploration 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 Brunswick Exploration will offset losses from the drop in Brunswick Exploration's long position.| Westward Gold vs. Heliostar Metals | Westward Gold vs. Revival Gold | Westward Gold vs. Cabral Gold | Westward Gold vs. Cassiar Gold Corp |
| Brunswick Exploration vs. Heliostar Metals | Brunswick Exploration vs. Independence Gold Corp | Brunswick Exploration vs. Westward Gold | Brunswick Exploration vs. Snowline 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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