Correlation Between Timberline Resources and Wesdome Gold

Can any of the company-specific risk be diversified away by investing in both Timberline Resources 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 Timberline Resources and Wesdome Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Timberline Resources and Wesdome Gold Mines, you can compare the effects of market volatilities on Timberline Resources 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 Timberline Resources with a short position of Wesdome Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Timberline Resources and Wesdome Gold.

Diversification Opportunities for Timberline Resources and Wesdome Gold

0.0

Correlation Coefficient

Timberline Resources  Wesdome Gold

Pay attention - limited upside

The 3 months correlation between Timberline and Wesdome is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Timberline Resources 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 Timberline Resources 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 Timberline Resources 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 Timberline Resources i.e., Timberline Resources and Wesdome Gold go up and down completely randomly.

Pair Corralation between Timberline Resources and Wesdome Gold

If you would invest  872.00  in Wesdome Gold Mines on December 21, 2024 and sell it today you would earn a total of  232.00  from holding Wesdome Gold Mines or generate 26.61% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Timberline Resources  vs.  Wesdome Gold Mines

Timberline Resources

Risk-Adjusted Performance

Very Weak

Over the last 90 days Timberline Resources has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Timberline Resources is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Wesdome Gold Mines

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Wesdome Gold Mines are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile technical and fundamental indicators, Wesdome Gold reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Timberline Resources and Wesdome Gold

The main advantage of trading using opposite Timberline Resources and Wesdome Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Timberline Resources 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.

The idea behind Timberline Resources and Wesdome Gold Mines 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.

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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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.