Correlation Between Westward Gold and TinOne Resources
Can any of the company-specific risk be diversified away by investing in both Westward Gold and TinOne 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 TinOne 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 TinOne Resources, you can compare the effects of market volatilities on Westward Gold and TinOne 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 TinOne Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Westward Gold and TinOne Resources.
Diversification Opportunities for Westward Gold and TinOne Resources
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Westward and TinOne is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Westward Gold and TinOne Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TinOne 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 TinOne Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TinOne Resources has no effect on the direction of Westward Gold i.e., Westward Gold and TinOne Resources go up and down completely randomly.
Pair Corralation between Westward Gold and TinOne Resources
Assuming the 90 days horizon Westward Gold is expected to generate 8.22 times less return on investment than TinOne Resources. But when comparing it to its historical volatility, Westward Gold is 4.0 times less risky than TinOne Resources. It trades about 0.04 of its potential returns per unit of risk. TinOne Resources is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 7.78 in TinOne Resources on August 30, 2024 and sell it today you would lose (4.35) from holding TinOne Resources or give up 55.91% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Westward Gold vs. TinOne Resources
Performance |
| Timeline |
| Westward Gold |
| TinOne Resources |
Westward Gold and TinOne Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Westward Gold and TinOne Resources
The main advantage of trading using opposite Westward Gold and TinOne Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Westward Gold position performs unexpectedly, TinOne 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 TinOne Resources will offset losses from the drop in TinOne Resources' long position.| Westward Gold vs. Vertiv Holdings Co | Westward Gold vs. Nasdaq Inc | Westward Gold vs. McDonalds | Westward Gold vs. Walmart |
| TinOne Resources vs. Vertiv Holdings Co | TinOne Resources vs. Nasdaq Inc | TinOne Resources vs. McDonalds | TinOne 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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