Correlation Between White Gold and Westward Gold
Can any of the company-specific risk be diversified away by investing in both White Gold and Westward Gold 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 White Gold and Westward Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between White Gold Corp and Westward Gold, you can compare the effects of market volatilities on White Gold and Westward Gold 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 White Gold with a short position of Westward Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of White Gold and Westward Gold.
Diversification Opportunities for White Gold and Westward Gold
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between White and Westward is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding White Gold Corp and Westward Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Westward Gold and White 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 White Gold Corp are associated (or correlated) with Westward Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Westward Gold has no effect on the direction of White Gold i.e., White Gold and Westward Gold go up and down completely randomly.
Pair Corralation between White Gold and Westward Gold
Assuming the 90 days horizon White Gold is expected to generate 18.93 times less return on investment than Westward Gold. But when comparing it to its historical volatility, White Gold Corp is 1.44 times less risky than Westward Gold. It trades about 0.0 of its potential returns per unit of risk. Westward Gold is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 5.34 in Westward Gold on September 3, 2024 and sell it today you would lose (0.03) from holding Westward Gold or give up 0.56% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
White Gold Corp vs. Westward Gold
Performance |
| Timeline |
| White Gold Corp |
| Westward Gold |
White Gold and Westward Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with White Gold and Westward Gold
The main advantage of trading using opposite White Gold and Westward Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if White Gold position performs unexpectedly, Westward Gold 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 Westward Gold will offset losses from the drop in Westward Gold's long position.| White Gold vs. Puma Exploration | White Gold vs. Endurance Gold | White Gold vs. Grande Portage Resources | White Gold vs. Altamira Gold Corp |
| Westward Gold vs. Heliostar Metals | Westward Gold vs. Revival Gold | Westward Gold vs. Cabral Gold | Westward Gold vs. Cassiar 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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