Correlation Between West Vault and Alamos Gold
Can any of the company-specific risk be diversified away by investing in both West Vault and Alamos 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 West Vault and Alamos Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between West Vault Mining and Alamos Gold, you can compare the effects of market volatilities on West Vault and Alamos 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 West Vault with a short position of Alamos Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of West Vault and Alamos Gold.
Diversification Opportunities for West Vault and Alamos Gold
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between West and Alamos is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding West Vault Mining and Alamos Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alamos Gold and West Vault 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 West Vault Mining are associated (or correlated) with Alamos Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alamos Gold has no effect on the direction of West Vault i.e., West Vault and Alamos Gold go up and down completely randomly.
Pair Corralation between West Vault and Alamos Gold
Assuming the 90 days horizon West Vault Mining is expected to under-perform the Alamos Gold. In addition to that, West Vault is 2.28 times more volatile than Alamos Gold. It trades about -0.13 of its total potential returns per unit of risk. Alamos Gold is currently generating about -0.13 per unit of volatility. If you would invest 2,011 in Alamos Gold on September 3, 2024 and sell it today you would lose (129.00) from holding Alamos Gold or give up 6.41% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
West Vault Mining vs. Alamos Gold
Performance |
| Timeline |
| West Vault Mining |
| Alamos Gold |
West Vault and Alamos Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with West Vault and Alamos Gold
The main advantage of trading using opposite West Vault and Alamos Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if West Vault position performs unexpectedly, Alamos 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 Alamos Gold will offset losses from the drop in Alamos Gold's long position.| West Vault vs. Harmony Gold Mining | West Vault vs. SPACE | West Vault vs. T Rowe Price | West Vault vs. Ampleforth |
| Alamos Gold vs. Pan American Silver | Alamos Gold vs. Newmont Goldcorp Corp | Alamos Gold vs. Wheaton Precious Metals | Alamos Gold vs. Franco Nevada |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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