Correlation Between West Vault and Independence Gold
Can any of the company-specific risk be diversified away by investing in both West Vault and Independence 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 Independence 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 Independence Gold Corp, you can compare the effects of market volatilities on West Vault and Independence 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 Independence Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of West Vault and Independence Gold.
Diversification Opportunities for West Vault and Independence Gold
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between West and Independence is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding West Vault Mining and Independence Gold Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Independence Gold Corp 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 Independence Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Independence Gold Corp has no effect on the direction of West Vault i.e., West Vault and Independence Gold go up and down completely randomly.
Pair Corralation between West Vault and Independence Gold
Assuming the 90 days horizon West Vault is expected to generate 83.86 times less return on investment than Independence Gold. But when comparing it to its historical volatility, West Vault Mining is 1.68 times less risky than Independence Gold. It trades about 0.0 of its potential returns per unit of risk. Independence Gold Corp is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 16.00 in Independence Gold Corp on September 3, 2024 and sell it today you would earn a total of 0.00 from holding Independence Gold Corp or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
West Vault Mining vs. Independence Gold Corp
Performance |
| Timeline |
| West Vault Mining |
| Independence Gold Corp |
West Vault and Independence Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with West Vault and Independence Gold
The main advantage of trading using opposite West Vault and Independence Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if West Vault position performs unexpectedly, Independence 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 Independence Gold will offset losses from the drop in Independence Gold's long position.| West Vault vs. Harmony Gold Mining | West Vault vs. SPACE | West Vault vs. T Rowe Price | West Vault vs. Ampleforth |
| Independence Gold vs. Heliostar Metals | Independence Gold vs. Revival Gold | Independence Gold vs. Cabral Gold | Independence 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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