Correlation Between Orezone Gold and CCL Industries
Can any of the company-specific risk be diversified away by investing in both Orezone Gold and CCL Industries 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 CCL Industries 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 CCL Industries, you can compare the effects of market volatilities on Orezone Gold and CCL Industries 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 CCL Industries. Check out your portfolio center. Please also check ongoing floating volatility patterns of Orezone Gold and CCL Industries.
Diversification Opportunities for Orezone Gold and CCL Industries
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Orezone and CCL is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Orezone Gold Corp and CCL Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CCL Industries 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 CCL Industries. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CCL Industries has no effect on the direction of Orezone Gold i.e., Orezone Gold and CCL Industries go up and down completely randomly.
Pair Corralation between Orezone Gold and CCL Industries
Assuming the 90 days trading horizon Orezone Gold Corp is expected to generate 4.13 times more return on investment than CCL Industries. However, Orezone Gold is 4.13 times more volatile than CCL Industries. It trades about 0.14 of its potential returns per unit of risk. CCL Industries is currently generating about -0.26 per unit of risk. If you would invest 62.00 in Orezone Gold Corp on October 22, 2024 and sell it today you would earn a total of 5.00 from holding Orezone Gold Corp or generate 8.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Orezone Gold Corp vs. CCL Industries
Performance |
| Timeline |
| Orezone Gold Corp |
| CCL Industries |
Orezone Gold and CCL Industries Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Orezone Gold and CCL Industries
The main advantage of trading using opposite Orezone Gold and CCL Industries positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Orezone Gold position performs unexpectedly, CCL Industries 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 CCL Industries will offset losses from the drop in CCL Industries' long position.| Orezone Gold vs. i 80 Gold Corp | Orezone Gold vs. Perseus Mining | Orezone Gold vs. K92 Mining | Orezone Gold vs. GoGold Resources |
| CCL Industries vs. Stella Jones | CCL Industries vs. Gildan Activewear | CCL Industries vs. Toromont Industries | CCL Industries vs. Waste Connections |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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