Correlation Between Westward Gold and Maritime Resources
Can any of the company-specific risk be diversified away by investing in both Westward Gold and Maritime 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 Maritime 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 Maritime Resources Corp, you can compare the effects of market volatilities on Westward Gold and Maritime 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 Maritime Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Westward Gold and Maritime Resources.
Diversification Opportunities for Westward Gold and Maritime Resources
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Westward and Maritime is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Westward Gold and Maritime Resources Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Maritime Resources Corp 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 Maritime Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Maritime Resources Corp has no effect on the direction of Westward Gold i.e., Westward Gold and Maritime Resources go up and down completely randomly.
Pair Corralation between Westward Gold and Maritime Resources
Assuming the 90 days horizon Westward Gold is expected to generate 0.83 times more return on investment than Maritime Resources. However, Westward Gold is 1.21 times less risky than Maritime Resources. It trades about 0.04 of its potential returns per unit of risk. Maritime Resources Corp is currently generating about -0.02 per unit of risk. If you would invest 5.43 in Westward Gold on August 30, 2024 and sell it today you would lose (0.04) from holding Westward Gold or give up 0.74% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Westward Gold vs. Maritime Resources Corp
Performance |
| Timeline |
| Westward Gold |
| Maritime Resources Corp |
Westward Gold and Maritime Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Westward Gold and Maritime Resources
The main advantage of trading using opposite Westward Gold and Maritime Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Westward Gold position performs unexpectedly, Maritime 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 Maritime Resources will offset losses from the drop in Maritime Resources' long position.| Westward Gold vs. Vertiv Holdings Co | Westward Gold vs. Nasdaq Inc | Westward Gold vs. McDonalds | Westward Gold vs. Walmart |
| Maritime Resources vs. Vertiv Holdings Co | Maritime Resources vs. Nasdaq Inc | Maritime Resources vs. McDonalds | Maritime Resources vs. Walmart |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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