Correlation Between Westward Gold and Red Eagle
Can any of the company-specific risk be diversified away by investing in both Westward Gold and Red Eagle 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 Red Eagle into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Westward Gold and Red Eagle Mining, you can compare the effects of market volatilities on Westward Gold and Red Eagle 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 Red Eagle. Check out your portfolio center. Please also check ongoing floating volatility patterns of Westward Gold and Red Eagle.
Diversification Opportunities for Westward Gold and Red Eagle
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Westward and Red is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Westward Gold and Red Eagle Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Red Eagle Mining 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 Red Eagle. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Red Eagle Mining has no effect on the direction of Westward Gold i.e., Westward Gold and Red Eagle go up and down completely randomly.
Pair Corralation between Westward Gold and Red Eagle
Assuming the 90 days horizon Westward Gold is expected to generate 6.78 times less return on investment than Red Eagle. But when comparing it to its historical volatility, Westward Gold is 6.1 times less risky than Red Eagle. It trades about 0.04 of its potential returns per unit of risk. Red Eagle Mining is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 0.01 in Red Eagle Mining on August 30, 2024 and sell it today you would earn a total of 0.00 from holding Red Eagle Mining or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 99.8% |
| Values | Daily Returns |
Westward Gold vs. Red Eagle Mining
Performance |
| Timeline |
| Westward Gold |
| Red Eagle Mining |
Westward Gold and Red Eagle Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Westward Gold and Red Eagle
The main advantage of trading using opposite Westward Gold and Red Eagle positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Westward Gold position performs unexpectedly, Red Eagle 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 Red Eagle will offset losses from the drop in Red Eagle's long position.| Westward Gold vs. Vertiv Holdings Co | Westward Gold vs. Nasdaq Inc | Westward Gold vs. McDonalds | Westward Gold vs. Walmart |
| Red Eagle vs. Silver Hammer Mining | Red Eagle vs. Reyna Silver Corp | Red Eagle vs. Guanajuato Silver | Red Eagle vs. Silver One 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 Stocks Directory module to find actively traded stocks across global markets.
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