Correlation Between Westhaven Gold and Satori Resources

Can any of the company-specific risk be diversified away by investing in both Westhaven Gold and Satori Resources 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 Satori Resources 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 Satori Resources, you can compare the effects of market volatilities on Westhaven Gold and Satori Resources 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 Satori Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Westhaven Gold and Satori Resources.

Diversification Opportunities for Westhaven Gold and Satori Resources

0.87

Correlation Coefficient

Westhaven Gold  Satori Resources

Very poor diversification

The 3 months correlation between Westhaven and Satori is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Westhaven Gold Corp and Satori Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Satori Resources 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 Satori Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Satori Resources has no effect on the direction of Westhaven Gold i.e., Westhaven Gold and Satori Resources go up and down completely randomly.

Pair Corralation between Westhaven Gold and Satori Resources

Assuming the 90 days horizon Westhaven Gold Corp is expected to under-perform the Satori Resources. In addition to that, Westhaven Gold is 1.56 times more volatile than Satori Resources. It trades about -0.14 of its total potential returns per unit of risk. Satori Resources is currently generating about -0.08 per unit of volatility. If you would invest  14.00  in Satori Resources on September 23, 2024 and sell it today you would lose (3.00) from holding Satori Resources or give up 21.43% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	100.0%
Values	Daily Returns

Westhaven Gold Corp  vs.  Satori Resources

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 January 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Satori Resources

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Satori Resources 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 January 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Westhaven Gold and Satori Resources

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

The idea behind Westhaven Gold Corp and Satori Resources 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.

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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.