Correlation Between Ophir Gold and Torex Gold
Can any of the company-specific risk be diversified away by investing in both Ophir Gold and Torex 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 Ophir Gold and Torex Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ophir Gold Corp and Torex Gold Resources, you can compare the effects of market volatilities on Ophir Gold and Torex 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 Ophir Gold with a short position of Torex Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ophir Gold and Torex Gold.
Diversification Opportunities for Ophir Gold and Torex Gold
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Ophir and Torex is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Ophir Gold Corp and Torex Gold Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Torex Gold Resources and Ophir 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 Ophir Gold Corp are associated (or correlated) with Torex Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Torex Gold Resources has no effect on the direction of Ophir Gold i.e., Ophir Gold and Torex Gold go up and down completely randomly.
Pair Corralation between Ophir Gold and Torex Gold
Assuming the 90 days horizon Ophir Gold Corp is expected to generate 2.96 times more return on investment than Torex Gold. However, Ophir Gold is 2.96 times more volatile than Torex Gold Resources. It trades about 0.15 of its potential returns per unit of risk. Torex Gold Resources is currently generating about 0.06 per unit of risk. 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 |
Ophir Gold Corp vs. Torex Gold Resources
Performance |
| Timeline |
| Ophir Gold Corp |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Torex Gold Resources |
Ophir Gold and Torex Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ophir Gold and Torex Gold
The main advantage of trading using opposite Ophir Gold and Torex Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ophir Gold position performs unexpectedly, Torex 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 Torex Gold will offset losses from the drop in Torex Gold's long position.| Ophir Gold vs. White Gold Corp | Ophir Gold vs. Puma Exploration | Ophir Gold vs. Endurance Gold | Ophir Gold vs. Red Pine Exploration |
| Torex Gold vs. Silver Hammer Mining | Torex Gold vs. Reyna Silver Corp | Torex Gold vs. Guanajuato Silver | Torex Gold vs. Silver One Resources |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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