Correlation Between Dynacor Gold and Orla Mining
Can any of the company-specific risk be diversified away by investing in both Dynacor Gold and Orla Mining 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 Dynacor Gold and Orla Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dynacor Gold Mines and Orla Mining, you can compare the effects of market volatilities on Dynacor Gold and Orla Mining 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 Dynacor Gold with a short position of Orla Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dynacor Gold and Orla Mining.
Diversification Opportunities for Dynacor Gold and Orla Mining
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Dynacor and Orla is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Dynacor Gold Mines and Orla Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Orla Mining and Dynacor 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 Dynacor Gold Mines are associated (or correlated) with Orla Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Orla Mining has no effect on the direction of Dynacor Gold i.e., Dynacor Gold and Orla Mining go up and down completely randomly.
Pair Corralation between Dynacor Gold and Orla Mining
Assuming the 90 days horizon Dynacor Gold Mines is expected to under-perform the Orla Mining. But the pink sheet apears to be less risky and, when comparing its historical volatility, Dynacor Gold Mines is 1.14 times less risky than Orla Mining. The pink sheet trades about -0.1 of its potential returns per unit of risk. The Orla Mining is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest 590.00 in Orla Mining on November 27, 2024 and sell it today you would earn a total of 79.00 from holding Orla Mining or generate 13.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dynacor Gold Mines vs. Orla Mining
Performance |
| Timeline |
| Dynacor Gold Mines |
| Orla Mining |
Dynacor Gold and Orla Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dynacor Gold and Orla Mining
The main advantage of trading using opposite Dynacor Gold and Orla Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dynacor Gold position performs unexpectedly, Orla Mining 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 Orla Mining will offset losses from the drop in Orla Mining's long position.The idea behind Dynacor Gold Mines and Orla Mining 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.| Orla Mining vs. K92 Mining | Orla Mining vs. Equinox Gold Corp | Orla Mining vs. Contango ORE | Orla Mining vs. Sandstorm Gold Ltd |
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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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