Correlation Between Omai Gold and Aurion Resources
Can any of the company-specific risk be diversified away by investing in both Omai Gold and Aurion 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 Omai Gold and Aurion Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Omai Gold Mines and Aurion Resources, you can compare the effects of market volatilities on Omai Gold and Aurion 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 Omai Gold with a short position of Aurion Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Omai Gold and Aurion Resources.
Diversification Opportunities for Omai Gold and Aurion Resources
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Omai and Aurion is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Omai Gold Mines and Aurion Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aurion Resources and Omai 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 Omai Gold Mines are associated (or correlated) with Aurion Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aurion Resources has no effect on the direction of Omai Gold i.e., Omai Gold and Aurion Resources go up and down completely randomly.
Pair Corralation between Omai Gold and Aurion Resources
Assuming the 90 days horizon Omai Gold Mines is expected to generate 1.22 times more return on investment than Aurion Resources. However, Omai Gold is 1.22 times more volatile than Aurion Resources. It trades about -0.05 of its potential returns per unit of risk. Aurion Resources is currently generating about -0.13 per unit of risk. If you would invest 13.00 in Omai Gold Mines on September 2, 2024 and sell it today you would lose (1.00) from holding Omai Gold Mines or give up 7.69% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Omai Gold Mines vs. Aurion Resources
Performance |
| Timeline |
| Omai Gold Mines |
| Aurion Resources |
Omai Gold and Aurion Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Omai Gold and Aurion Resources
The main advantage of trading using opposite Omai Gold and Aurion Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Omai Gold position performs unexpectedly, Aurion 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 Aurion Resources will offset losses from the drop in Aurion Resources' long position.| Omai Gold vs. Aurion Resources | Omai Gold vs. Rio2 Limited | Omai Gold vs. Palamina Corp | Omai Gold vs. Grande Portage Resources |
| Aurion Resources vs. South32 Limited | Aurion Resources vs. NioCorp Developments Ltd | Aurion Resources vs. HUMANA INC | Aurion Resources vs. SCOR PK |
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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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