Correlation Between Generation Mining and WSP Global

Can any of the company-specific risk be diversified away by investing in both Generation Mining and WSP Global 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 Generation Mining and WSP Global into the same portfolio, which is an essential part of the fundamental portfolio management process.

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

Diversification Opportunities for Generation Mining and WSP Global

-0.43

Correlation Coefficient

Generation Mining  WSP Global

Very good diversification

The 3 months correlation between Generation and WSP is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Generation Mining and WSP Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WSP Global and Generation Mining 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 Generation Mining are associated (or correlated) with WSP Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WSP Global has no effect on the direction of Generation Mining i.e., Generation Mining and WSP Global go up and down completely randomly.

Pair Corralation between Generation Mining and WSP Global

Assuming the 90 days trading horizon Generation Mining is expected to generate 5.06 times more return on investment than WSP Global. However, Generation Mining is 5.06 times more volatile than WSP Global. It trades about 0.18 of its potential returns per unit of risk. WSP Global is currently generating about 0.0 per unit of risk. If you would invest  34.00  in Generation Mining on July 4, 2025 and sell it today you would earn a total of  25.00  from holding Generation Mining or generate 73.53% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	98.41%
Values	Daily Returns

Generation Mining  vs.  WSP Global

Generation Mining

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Generation Mining are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of very fragile basic indicators, Generation Mining displayed solid returns over the last few months and may actually be approaching a breakup point.

WSP Global

Risk-Adjusted Performance

Weakest

Over the last 90 days WSP Global has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, WSP Global is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Generation Mining and WSP Global

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

The idea behind Generation Mining and WSP Global 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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.