Correlation Between Ero Copper and Wesdome Gold
Can any of the company-specific risk be diversified away by investing in both Ero Copper 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 Ero Copper and Wesdome Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ero Copper Corp and Wesdome Gold Mines, you can compare the effects of market volatilities on Ero Copper 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 Ero Copper with a short position of Wesdome Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ero Copper and Wesdome Gold.
Diversification Opportunities for Ero Copper and Wesdome Gold
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Ero and Wesdome is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Ero Copper Corp 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 Ero Copper 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 Ero Copper Corp 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 Ero Copper i.e., Ero Copper and Wesdome Gold go up and down completely randomly.
Pair Corralation between Ero Copper and Wesdome Gold
Assuming the 90 days trading horizon Ero Copper Corp is expected to generate 1.02 times more return on investment than Wesdome Gold. However, Ero Copper is 1.02 times more volatile than Wesdome Gold Mines. It trades about 0.24 of its potential returns per unit of risk. Wesdome Gold Mines is currently generating about 0.13 per unit of risk. If you would invest 1,904 in Ero Copper Corp on August 17, 2025 and sell it today you would earn a total of 1,115 from holding Ero Copper Corp or generate 58.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ero Copper Corp vs. Wesdome Gold Mines
Performance |
| Timeline |
| Ero Copper Corp |
| Wesdome Gold Mines |
Ero Copper and Wesdome Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ero Copper and Wesdome Gold
The main advantage of trading using opposite Ero Copper and Wesdome Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ero Copper 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.| Ero Copper vs. Wesdome Gold Mines | Ero Copper vs. Ivanhoe Energy | Ero Copper vs. Champion Iron | Ero Copper vs. Erdene Resource Development |
| Wesdome Gold vs. Centerra Gold | Wesdome Gold vs. Seabridge Gold | Wesdome Gold vs. Ero Copper Corp | Wesdome Gold vs. Allied Gold |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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