Correlation Between Wesdome Gold and Compania
Can any of the company-specific risk be diversified away by investing in both Wesdome Gold and Compania 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 Wesdome Gold and Compania into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Wesdome Gold Mines and Compania de Minas, you can compare the effects of market volatilities on Wesdome Gold and Compania 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 Wesdome Gold with a short position of Compania. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wesdome Gold and Compania.
Diversification Opportunities for Wesdome Gold and Compania
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Wesdome and Compania is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Wesdome Gold Mines and Compania de Minas in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Compania de Minas and Wesdome 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 Wesdome Gold Mines are associated (or correlated) with Compania. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Compania de Minas has no effect on the direction of Wesdome Gold i.e., Wesdome Gold and Compania go up and down completely randomly.
Pair Corralation between Wesdome Gold and Compania
Assuming the 90 days trading horizon Wesdome Gold Mines is expected to generate 1.15 times more return on investment than Compania. However, Wesdome Gold is 1.15 times more volatile than Compania de Minas. It trades about 0.13 of its potential returns per unit of risk. Compania de Minas is currently generating about 0.15 per unit of risk. If you would invest 1,635 in Wesdome Gold Mines on August 17, 2025 and sell it today you would earn a total of 425.00 from holding Wesdome Gold Mines or generate 25.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 98.44% |
| Values | Daily Returns |
Wesdome Gold Mines vs. Compania de Minas
Performance |
| Timeline |
| Wesdome Gold Mines |
| Compania de Minas |
Wesdome Gold and Compania Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wesdome Gold and Compania
The main advantage of trading using opposite Wesdome Gold and Compania positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wesdome Gold position performs unexpectedly, Compania 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 Compania will offset losses from the drop in Compania's long position.| Wesdome Gold vs. Centerra Gold | Wesdome Gold vs. Seabridge Gold | Wesdome Gold vs. Ero Copper Corp | Wesdome Gold vs. Allied Gold |
| Compania vs. Triple Flag Precious | Compania vs. New Gold | Compania vs. Ufp Industries | Compania vs. Eldorado Gold Corp |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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