Correlation Between Omineca Mining and West Vault

Can any of the company-specific risk be diversified away by investing in both Omineca Mining and West Vault 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 Omineca Mining and West Vault into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Omineca Mining and and West Vault Mining, you can compare the effects of market volatilities on Omineca Mining and West Vault 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 Omineca Mining with a short position of West Vault. Check out your portfolio center. Please also check ongoing floating volatility patterns of Omineca Mining and West Vault.

Diversification Opportunities for Omineca Mining and West Vault

0.31

Correlation Coefficient

Omineca Mining  West Vault

Weak diversification

The 3 months correlation between Omineca and West is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Omineca Mining and and West Vault Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on West Vault Mining and Omineca Mining 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 Omineca Mining and are associated (or correlated) with West Vault. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of West Vault Mining has no effect on the direction of Omineca Mining i.e., Omineca Mining and West Vault go up and down completely randomly.

Pair Corralation between Omineca Mining and West Vault

Assuming the 90 days horizon Omineca Mining is expected to generate 2.88 times less return on investment than West Vault. In addition to that, Omineca Mining is 1.37 times more volatile than West Vault Mining. It trades about 0.01 of its total potential returns per unit of risk. West Vault Mining is currently generating about 0.03 per unit of volatility. If you would invest  74.00  in West Vault Mining on October 7, 2024 and sell it today you would earn a total of  1.00  from holding West Vault Mining or generate 1.35% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Omineca Mining and  vs.  West Vault Mining

Omineca Mining

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Omineca Mining and are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak basic indicators, Omineca Mining reported solid returns over the last few months and may actually be approaching a breakup point.

West Vault Mining

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in West Vault Mining are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile fundamental indicators, West Vault reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Omineca Mining and West Vault

The main advantage of trading using opposite Omineca Mining and West Vault positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Omineca Mining position performs unexpectedly, West Vault 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 West Vault will offset losses from the drop in West Vault's long position.

The idea behind Omineca Mining and and West Vault Mining pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.