Correlation Between K92 Mining and Ophir Gold
Can any of the company-specific risk be diversified away by investing in both K92 Mining and Ophir Gold 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 K92 Mining and Ophir Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between K92 Mining and Ophir Gold Corp, you can compare the effects of market volatilities on K92 Mining and Ophir Gold 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 K92 Mining with a short position of Ophir Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of K92 Mining and Ophir Gold.
Diversification Opportunities for K92 Mining and Ophir Gold
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between K92 and Ophir is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding K92 Mining and Ophir Gold Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ophir Gold Corp and K92 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 K92 Mining are associated (or correlated) with Ophir Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ophir Gold Corp has no effect on the direction of K92 Mining i.e., K92 Mining and Ophir Gold go up and down completely randomly.
Pair Corralation between K92 Mining and Ophir Gold
Assuming the 90 days horizon K92 Mining is expected to generate 21.53 times less return on investment than Ophir Gold. But when comparing it to its historical volatility, K92 Mining is 2.89 times less risky than Ophir Gold. It trades about 0.02 of its potential returns per unit of risk. Ophir Gold Corp is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 9.04 in Ophir Gold Corp on August 30, 2024 and sell it today you would earn a total of 29.96 from holding Ophir Gold Corp or generate 331.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 31.11% |
| Values | Daily Returns |
K92 Mining vs. Ophir Gold Corp
Performance |
| Timeline |
| K92 Mining |
| Ophir Gold Corp |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
K92 Mining and Ophir Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with K92 Mining and Ophir Gold
The main advantage of trading using opposite K92 Mining and Ophir Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if K92 Mining position performs unexpectedly, Ophir Gold 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 Ophir Gold will offset losses from the drop in Ophir Gold's long position.| K92 Mining vs. I 80 Gold Corp | K92 Mining vs. Equinox Gold Corp | K92 Mining vs. Contango ORE | K92 Mining vs. Orla Mining |
| Ophir Gold vs. White Gold Corp | Ophir Gold vs. Puma Exploration | Ophir Gold vs. Endurance Gold | Ophir Gold vs. Red Pine Exploration |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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