Correlation Between Sitka Gold and Metropolitan West
Can any of the company-specific risk be diversified away by investing in both Sitka Gold and Metropolitan West 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 Sitka Gold and Metropolitan West into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sitka Gold Corp and Metropolitan West Total, you can compare the effects of market volatilities on Sitka Gold and Metropolitan West 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 Sitka Gold with a short position of Metropolitan West. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sitka Gold and Metropolitan West.
Diversification Opportunities for Sitka Gold and Metropolitan West
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Sitka and Metropolitan is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Sitka Gold Corp and Metropolitan West Total in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Metropolitan West Total and Sitka 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 Sitka Gold Corp are associated (or correlated) with Metropolitan West. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Metropolitan West Total has no effect on the direction of Sitka Gold i.e., Sitka Gold and Metropolitan West go up and down completely randomly.
Pair Corralation between Sitka Gold and Metropolitan West
Assuming the 90 days horizon Sitka Gold Corp is expected to generate 13.38 times more return on investment than Metropolitan West. However, Sitka Gold is 13.38 times more volatile than Metropolitan West Total. It trades about 0.17 of its potential returns per unit of risk. Metropolitan West Total is currently generating about 0.16 per unit of risk. If you would invest 38.00 in Sitka Gold Corp on May 31, 2025 and sell it today you would earn a total of 18.00 from holding Sitka Gold Corp or generate 47.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sitka Gold Corp vs. Metropolitan West Total
Performance |
| Timeline |
| Sitka Gold Corp |
| Metropolitan West Total |
Sitka Gold and Metropolitan West Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sitka Gold and Metropolitan West
The main advantage of trading using opposite Sitka Gold and Metropolitan West positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sitka Gold position performs unexpectedly, Metropolitan West 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 Metropolitan West will offset losses from the drop in Metropolitan West's long position.| Sitka Gold vs. Gold Springs Resource | Sitka Gold vs. Lion One Metals | Sitka Gold vs. Palamina Corp | Sitka Gold vs. Peloton Minerals |
| Metropolitan West vs. Europacific Growth Fund | Metropolitan West vs. Templeton Global Bond | Metropolitan West vs. Mfs Value Fund | Metropolitan West vs. Mfs Emerging Markets |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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