Correlation Between West Vault and Royal Gold
Can any of the company-specific risk be diversified away by investing in both West Vault and Royal 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 Royal 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 Royal Gold, you can compare the effects of market volatilities on West Vault and Royal 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 Royal Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of West Vault and Royal Gold.
Diversification Opportunities for West Vault and Royal Gold
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between West and Royal is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding West Vault Mining and Royal Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Royal 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 Royal Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Royal Gold has no effect on the direction of West Vault i.e., West Vault and Royal Gold go up and down completely randomly.
Pair Corralation between West Vault and Royal Gold
Assuming the 90 days horizon West Vault Mining is expected to generate 2.23 times more return on investment than Royal Gold. However, West Vault is 2.23 times more volatile than Royal Gold. It trades about 0.07 of its potential returns per unit of risk. Royal Gold is currently generating about 0.1 per unit of risk. If you would invest 71.00 in West Vault Mining on December 1, 2024 and sell it today you would earn a total of 3.00 from holding West Vault Mining or generate 4.23% 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. Royal Gold
Performance |
| Timeline |
| West Vault Mining |
| Royal Gold |
West Vault and Royal Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with West Vault and Royal Gold
The main advantage of trading using opposite West Vault and Royal Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if West Vault position performs unexpectedly, Royal 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 Royal Gold will offset losses from the drop in Royal 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 |
| Royal Gold vs. Wheaton Precious Metals | Royal Gold vs. Agnico Eagle Mines | Royal Gold vs. Sandstorm Gold Ltd | Royal Gold vs. Osisko Gold Ro |
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 Stocks Directory module to find actively traded stocks across global markets.
Other Complementary Tools
| Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume |