Correlation Between O3 Mining and Integra Resources
Can any of the company-specific risk be diversified away by investing in both O3 Mining and Integra Resources 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 O3 Mining and Integra Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between O3 Mining and Integra Resources Corp, you can compare the effects of market volatilities on O3 Mining and Integra Resources 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 O3 Mining with a short position of Integra Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of O3 Mining and Integra Resources.
Diversification Opportunities for O3 Mining and Integra Resources
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between OIII and Integra is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding O3 Mining and Integra Resources Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Integra Resources Corp and O3 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 O3 Mining are associated (or correlated) with Integra Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Integra Resources Corp has no effect on the direction of O3 Mining i.e., O3 Mining and Integra Resources go up and down completely randomly.
Pair Corralation between O3 Mining and Integra Resources
Assuming the 90 days trading horizon O3 Mining is expected to generate 0.87 times more return on investment than Integra Resources. However, O3 Mining is 1.15 times less risky than Integra Resources. It trades about -0.06 of its potential returns per unit of risk. Integra Resources Corp is currently generating about -0.41 per unit of risk. If you would invest 112.00 in O3 Mining on August 25, 2024 and sell it today you would lose (4.00) from holding O3 Mining or give up 3.57% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
O3 Mining vs. Integra Resources Corp
Performance |
| Timeline |
| O3 Mining |
| Integra Resources Corp |
O3 Mining and Integra Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with O3 Mining and Integra Resources
The main advantage of trading using opposite O3 Mining and Integra Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if O3 Mining position performs unexpectedly, Integra Resources 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 Integra Resources will offset losses from the drop in Integra Resources' long position.| O3 Mining vs. First Majestic Silver | O3 Mining vs. Ivanhoe Energy | O3 Mining vs. Orezone Gold Corp | O3 Mining vs. Faraday Copper Corp |
| Integra Resources vs. Liberty Gold Corp | Integra Resources vs. Rio2 | Integra Resources vs. Revival Gold | Integra Resources vs. O3 Mining |
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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