Correlation Between Westhaven Gold and West Vault

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

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

Diversification Opportunities for Westhaven Gold and West Vault

0.57

Correlation Coefficient

Westhaven Gold  West Vault

Very weak diversification

The 3 months correlation between Westhaven and West is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Westhaven Gold Corp 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 Westhaven 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 Westhaven Gold Corp 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 Westhaven Gold i.e., Westhaven Gold and West Vault go up and down completely randomly.

Pair Corralation between Westhaven Gold and West Vault

Assuming the 90 days horizon Westhaven Gold Corp is expected to under-perform the West Vault. In addition to that, Westhaven Gold is 1.26 times more volatile than West Vault Mining. It trades about -0.02 of its total potential returns per unit of risk. West Vault Mining is currently generating about 0.01 per unit of volatility. If you would invest  78.00  in West Vault Mining on October 4, 2024 and sell it today you would lose (13.00) from holding West Vault Mining or give up 16.67% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	99.8%
Values	Daily Returns

Westhaven Gold Corp  vs.  West Vault Mining

Westhaven Gold Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Westhaven Gold Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

West Vault Mining

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days West Vault Mining has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable fundamental indicators, West Vault is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Westhaven Gold and West Vault

The main advantage of trading using opposite Westhaven Gold and West Vault positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Westhaven Gold 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 Westhaven Gold Corp 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.

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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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.