Correlation Between Infinico Metals and OceanaGold
Can any of the company-specific risk be diversified away by investing in both Infinico Metals and OceanaGold 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 Infinico Metals and OceanaGold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Infinico Metals Corp and OceanaGold, you can compare the effects of market volatilities on Infinico Metals and OceanaGold 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 Infinico Metals with a short position of OceanaGold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Infinico Metals and OceanaGold.
Diversification Opportunities for Infinico Metals and OceanaGold
-0.51 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Infinico and OceanaGold is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Infinico Metals Corp and OceanaGold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on OceanaGold and Infinico Metals 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 Infinico Metals Corp are associated (or correlated) with OceanaGold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of OceanaGold has no effect on the direction of Infinico Metals i.e., Infinico Metals and OceanaGold go up and down completely randomly.
Pair Corralation between Infinico Metals and OceanaGold
Assuming the 90 days trading horizon Infinico Metals Corp is expected to under-perform the OceanaGold. In addition to that, Infinico Metals is 3.22 times more volatile than OceanaGold. It trades about -0.17 of its total potential returns per unit of risk. OceanaGold is currently generating about 0.17 per unit of volatility. If you would invest 391.00 in OceanaGold on August 29, 2024 and sell it today you would earn a total of 42.00 from holding OceanaGold or generate 10.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 90.91% |
| Values | Daily Returns |
Infinico Metals Corp vs. OceanaGold
Performance |
| Timeline |
| Infinico Metals Corp |
| OceanaGold |
Infinico Metals and OceanaGold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Infinico Metals and OceanaGold
The main advantage of trading using opposite Infinico Metals and OceanaGold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Infinico Metals position performs unexpectedly, OceanaGold 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 OceanaGold will offset losses from the drop in OceanaGold's long position.The idea behind Infinico Metals Corp and OceanaGold 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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