Correlation Between Orezone Gold and B2Gold Corp
Can any of the company-specific risk be diversified away by investing in both Orezone Gold and B2Gold Corp 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 Orezone Gold and B2Gold Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Orezone Gold Corp and B2Gold Corp, you can compare the effects of market volatilities on Orezone Gold and B2Gold Corp 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 Orezone Gold with a short position of B2Gold Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Orezone Gold and B2Gold Corp.
Diversification Opportunities for Orezone Gold and B2Gold Corp
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Orezone and B2Gold is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Orezone Gold Corp and B2Gold Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on B2Gold Corp and Orezone 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 Orezone Gold Corp are associated (or correlated) with B2Gold Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of B2Gold Corp has no effect on the direction of Orezone Gold i.e., Orezone Gold and B2Gold Corp go up and down completely randomly.
Pair Corralation between Orezone Gold and B2Gold Corp
Assuming the 90 days trading horizon Orezone Gold Corp is expected to under-perform the B2Gold Corp. In addition to that, Orezone Gold is 1.51 times more volatile than B2Gold Corp. It trades about -0.03 of its total potential returns per unit of risk. B2Gold Corp is currently generating about 0.01 per unit of volatility. If you would invest 432.00 in B2Gold Corp on August 25, 2024 and sell it today you would lose (26.00) from holding B2Gold Corp or give up 6.02% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Orezone Gold Corp vs. B2Gold Corp
Performance |
| Timeline |
| Orezone Gold Corp |
| B2Gold Corp |
Orezone Gold and B2Gold Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Orezone Gold and B2Gold Corp
The main advantage of trading using opposite Orezone Gold and B2Gold Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Orezone Gold position performs unexpectedly, B2Gold Corp 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 B2Gold Corp will offset losses from the drop in B2Gold Corp's long position.| Orezone Gold vs. i 80 Gold Corp | Orezone Gold vs. Perseus Mining | Orezone Gold vs. K92 Mining | Orezone Gold vs. GoGold Resources |
| B2Gold Corp vs. Kinross Gold Corp | B2Gold Corp vs. IAMGold | B2Gold Corp vs. Barrick Gold Corp | B2Gold Corp vs. Agnico Eagle Mines |
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 Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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