Correlation Between Exxon and Westhaven Gold
Can any of the company-specific risk be diversified away by investing in both Exxon and Westhaven 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 Westhaven Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Exxon Mobil Corp and Westhaven Gold Corp, you can compare the effects of market volatilities on Exxon and Westhaven 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 Westhaven Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Exxon and Westhaven Gold.
Diversification Opportunities for Exxon and Westhaven Gold
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Exxon and Westhaven is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Exxon Mobil Corp and Westhaven Gold Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Westhaven Gold Corp 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 Corp are associated (or correlated) with Westhaven Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Westhaven Gold Corp has no effect on the direction of Exxon i.e., Exxon and Westhaven Gold go up and down completely randomly.
Pair Corralation between Exxon and Westhaven Gold
Considering the 90-day investment horizon Exxon is expected to generate 31.48 times less return on investment than Westhaven Gold. But when comparing it to its historical volatility, Exxon Mobil Corp is 3.16 times less risky than Westhaven Gold. It trades about 0.02 of its potential returns per unit of risk. Westhaven Gold Corp is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest 7.75 in Westhaven Gold Corp on November 28, 2024 and sell it today you would earn a total of 1.73 from holding Westhaven Gold Corp or generate 22.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Exxon Mobil Corp vs. Westhaven Gold Corp
Performance |
| Timeline |
| Exxon Mobil Corp |
| Westhaven Gold Corp |
Exxon and Westhaven Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Exxon and Westhaven Gold
The main advantage of trading using opposite Exxon and Westhaven Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Exxon position performs unexpectedly, Westhaven 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 Westhaven Gold will offset losses from the drop in Westhaven Gold's long position.| Exxon vs. Shell PLC ADR | Exxon vs. BP PLC ADR | Exxon vs. Suncor Energy | Exxon vs. Petroleo Brasileiro Petrobras |
| Westhaven Gold vs. Precipitate Gold Corp | Westhaven Gold vs. Hummingbird Resources PLC | Westhaven Gold vs. Klondike Gold Corp | Westhaven Gold vs. Exploits Discovery 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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