Correlation Between Wescan Goldfields and ExGen Resources
Can any of the company-specific risk be diversified away by investing in both Wescan Goldfields and ExGen Resources 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 Wescan Goldfields and ExGen Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Wescan Goldfields and ExGen Resources, you can compare the effects of market volatilities on Wescan Goldfields and ExGen Resources 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 Wescan Goldfields with a short position of ExGen Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wescan Goldfields and ExGen Resources.
Diversification Opportunities for Wescan Goldfields and ExGen Resources
-0.09 | Correlation Coefficient |
Good diversification
The 3 months correlation between Wescan and ExGen is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Wescan Goldfields and ExGen Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ExGen Resources and Wescan Goldfields 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 Wescan Goldfields are associated (or correlated) with ExGen Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ExGen Resources has no effect on the direction of Wescan Goldfields i.e., Wescan Goldfields and ExGen Resources go up and down completely randomly.
Pair Corralation between Wescan Goldfields and ExGen Resources
Assuming the 90 days horizon Wescan Goldfields is expected to generate 1.51 times more return on investment than ExGen Resources. However, Wescan Goldfields is 1.51 times more volatile than ExGen Resources. It trades about 0.14 of its potential returns per unit of risk. ExGen Resources is currently generating about 0.1 per unit of risk. If you would invest 2.00 in Wescan Goldfields on December 4, 2024 and sell it today you would earn a total of 2.50 from holding Wescan Goldfields or generate 125.0% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Wescan Goldfields vs. ExGen Resources
Performance |
Timeline |
Wescan Goldfields |
ExGen Resources |
Wescan Goldfields and ExGen Resources Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Wescan Goldfields and ExGen Resources
The main advantage of trading using opposite Wescan Goldfields and ExGen Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wescan Goldfields position performs unexpectedly, ExGen Resources 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 ExGen Resources will offset losses from the drop in ExGen Resources' long position.Wescan Goldfields vs. Renoworks Software | Wescan Goldfields vs. Northstar Clean Technologies | Wescan Goldfields vs. Andean Precious Metals | Wescan Goldfields vs. Partners Value Investments |
ExGen Resources vs. Titanium Transportation Group | ExGen Resources vs. Algoma Steel Group | ExGen Resources vs. Andean Precious Metals | ExGen Resources vs. Pace 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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