Correlation Between Exxon and Wesdome Gold
Can any of the company-specific risk be diversified away by investing in both Exxon and Wesdome 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 Exxon and Wesdome Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between EXXON MOBIL CDR and Wesdome Gold Mines, you can compare the effects of market volatilities on Exxon and Wesdome 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 Exxon with a short position of Wesdome Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Exxon and Wesdome Gold.
Diversification Opportunities for Exxon and Wesdome Gold
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Exxon and Wesdome is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding EXXON MOBIL CDR and Wesdome Gold Mines in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wesdome Gold Mines and Exxon 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 EXXON MOBIL CDR are associated (or correlated) with Wesdome Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wesdome Gold Mines has no effect on the direction of Exxon i.e., Exxon and Wesdome Gold go up and down completely randomly.
Pair Corralation between Exxon and Wesdome Gold
Assuming the 90 days trading horizon Exxon is expected to generate 7.11 times less return on investment than Wesdome Gold. But when comparing it to its historical volatility, EXXON MOBIL CDR is 2.73 times less risky than Wesdome Gold. It trades about 0.02 of its potential returns per unit of risk. Wesdome Gold Mines is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 1,196 in Wesdome Gold Mines on September 3, 2024 and sell it today you would earn a total of 27.00 from holding Wesdome Gold Mines or generate 2.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
EXXON MOBIL CDR vs. Wesdome Gold Mines
Performance |
| Timeline |
| EXXON MOBIL CDR |
| Wesdome Gold Mines |
Exxon and Wesdome Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Exxon and Wesdome Gold
The main advantage of trading using opposite Exxon and Wesdome Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Exxon position performs unexpectedly, Wesdome 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 Wesdome Gold will offset losses from the drop in Wesdome Gold's long position.| Exxon vs. Cogeco Communications | Exxon vs. Quipt Home Medical | Exxon vs. Rocky Mountain Liquor | Exxon vs. Datable Technology Corp |
| Wesdome Gold vs. OceanaGold | Wesdome Gold vs. Torex Gold Resources | Wesdome Gold vs. Alamos Gold | Wesdome Gold vs. Dundee Precious Metals |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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