Correlation Between Westhaven Gold and Fortune Bay
Can any of the company-specific risk be diversified away by investing in both Westhaven Gold and Fortune Bay 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 Westhaven Gold and Fortune Bay into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Westhaven Gold Corp and Fortune Bay Corp, you can compare the effects of market volatilities on Westhaven Gold and Fortune Bay 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 Westhaven Gold with a short position of Fortune Bay. Check out your portfolio center. Please also check ongoing floating volatility patterns of Westhaven Gold and Fortune Bay.
Diversification Opportunities for Westhaven Gold and Fortune Bay
-0.18 | Correlation Coefficient |
Good diversification
The 3 months correlation between Westhaven and Fortune is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Westhaven Gold Corp and Fortune Bay Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fortune Bay Corp and Westhaven 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 Westhaven Gold Corp are associated (or correlated) with Fortune Bay. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fortune Bay Corp has no effect on the direction of Westhaven Gold i.e., Westhaven Gold and Fortune Bay go up and down completely randomly.
Pair Corralation between Westhaven Gold and Fortune Bay
Assuming the 90 days horizon Westhaven Gold Corp is expected to under-perform the Fortune Bay. But the pink sheet apears to be less risky and, when comparing its historical volatility, Westhaven Gold Corp is 1.34 times less risky than Fortune Bay. The pink sheet trades about -0.02 of its potential returns per unit of risk. The Fortune Bay Corp is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 20.00 in Fortune Bay Corp on August 30, 2024 and sell it today you would lose (2.00) from holding Fortune Bay Corp or give up 10.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.8% |
| Values | Daily Returns |
Westhaven Gold Corp vs. Fortune Bay Corp
Performance |
| Timeline |
| Westhaven Gold Corp |
| Fortune Bay Corp |
Westhaven Gold and Fortune Bay Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Westhaven Gold and Fortune Bay
The main advantage of trading using opposite Westhaven Gold and Fortune Bay positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Westhaven Gold position performs unexpectedly, Fortune Bay 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 Fortune Bay will offset losses from the drop in Fortune Bay's long position.| Westhaven Gold vs. Precipitate Gold Corp | Westhaven Gold vs. Hummingbird Resources PLC | Westhaven Gold vs. Klondike Gold Corp | Westhaven Gold vs. Exploits Discovery Corp |
| Fortune Bay vs. Silver Hammer Mining | Fortune Bay vs. Reyna Silver Corp | Fortune Bay vs. Guanajuato Silver | Fortune Bay 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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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