Correlation Between White Gold and First Mining

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

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

Diversification Opportunities for White Gold and First Mining

-0.22

Correlation Coefficient

White Gold  First Mining

Very good diversification

The 3 months correlation between White and First is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding White Gold Corp and First Mining Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Mining Gold and White Gold 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 White Gold Corp are associated (or correlated) with First Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Mining Gold has no effect on the direction of White Gold i.e., White Gold and First Mining go up and down completely randomly.

Pair Corralation between White Gold and First Mining

Assuming the 90 days horizon White Gold is expected to generate 1.89 times less return on investment than First Mining. In addition to that, White Gold is 1.19 times more volatile than First Mining Gold. It trades about 0.04 of its total potential returns per unit of risk. First Mining Gold is currently generating about 0.08 per unit of volatility. If you would invest  12.00  in First Mining Gold on December 28, 2024 and sell it today you would earn a total of  2.00  from holding First Mining Gold or generate 16.67% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.41%
Values	Daily Returns

White Gold Corp  vs.  First Mining Gold

White Gold Corp

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in White Gold Corp are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, White Gold may actually be approaching a critical reversion point that can send shares even higher in April 2025.

First Mining Gold

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in First Mining Gold are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of very weak basic indicators, First Mining displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with White Gold and First Mining

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

The idea behind White Gold Corp and First Mining Gold 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.