Correlation Between West Vault and Cabral Gold
Can any of the company-specific risk be diversified away by investing in both West Vault and Cabral 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 Cabral 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 Cabral Gold, you can compare the effects of market volatilities on West Vault and Cabral 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 Cabral Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of West Vault and Cabral Gold.
Diversification Opportunities for West Vault and Cabral Gold
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between West and Cabral is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding West Vault Mining and Cabral Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cabral 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 Cabral Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cabral Gold has no effect on the direction of West Vault i.e., West Vault and Cabral Gold go up and down completely randomly.
Pair Corralation between West Vault and Cabral Gold
Assuming the 90 days horizon West Vault is expected to generate 3.58 times less return on investment than Cabral Gold. But when comparing it to its historical volatility, West Vault Mining is 1.58 times less risky than Cabral Gold. It trades about 0.05 of its potential returns per unit of risk. Cabral Gold is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 16.00 in Cabral Gold on November 28, 2024 and sell it today you would earn a total of 2.00 from holding Cabral Gold or generate 12.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
West Vault Mining vs. Cabral Gold
Performance |
| Timeline |
| West Vault Mining |
| Cabral Gold |
West Vault and Cabral Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with West Vault and Cabral Gold
The main advantage of trading using opposite West Vault and Cabral Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if West Vault position performs unexpectedly, Cabral 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 Cabral Gold will offset losses from the drop in Cabral Gold's long position.| West Vault vs. Aurelius Minerals | West Vault vs. Quebec Precious Metals | West Vault vs. Omineca Mining and | West Vault vs. Altamira Gold Corp |
| Cabral Gold vs. Puma Exploration | Cabral Gold vs. Endurance Gold | Cabral Gold vs. Red Pine Exploration | Cabral Gold vs. Falcon 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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