Correlation Between Olin and Vista Gold
Can any of the company-specific risk be diversified away by investing in both Olin and Vista 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 Olin and Vista Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Olin Corporation and Vista Gold, you can compare the effects of market volatilities on Olin and Vista 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 Olin with a short position of Vista Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Olin and Vista Gold.
Diversification Opportunities for Olin and Vista Gold
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Olin and Vista is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Olin Corp. and Vista Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vista Gold and Olin 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 Olin Corporation are associated (or correlated) with Vista Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vista Gold has no effect on the direction of Olin i.e., Olin and Vista Gold go up and down completely randomly.
Pair Corralation between Olin and Vista Gold
Considering the 90-day investment horizon Olin Corporation is expected to under-perform the Vista Gold. But the stock apears to be less risky and, when comparing its historical volatility, Olin Corporation is 1.09 times less risky than Vista Gold. The stock trades about -0.24 of its potential returns per unit of risk. The Vista Gold is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest 58.00 in Vista Gold on November 3, 2024 and sell it today you would earn a total of 6.00 from holding Vista Gold or generate 10.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Olin Corp. vs. Vista Gold
Performance |
| Timeline |
| Olin |
| Vista Gold |
Olin and Vista Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Olin and Vista Gold
The main advantage of trading using opposite Olin and Vista Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Olin position performs unexpectedly, Vista 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 Vista Gold will offset losses from the drop in Vista Gold's long position.| Olin vs. Select Energy Services | Olin vs. Westlake Chemical | Olin vs. Sensient Technologies | Olin vs. Axalta Coating Systems |
| Vista Gold vs. International Tower Hill | Vista Gold vs. Harmony Gold Mining | Vista Gold vs. Seabridge Gold | Vista Gold vs. IAMGold |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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