Correlation Between Orezone Gold and Centerra Gold
Can any of the company-specific risk be diversified away by investing in both Orezone Gold and Centerra 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 Orezone Gold and Centerra Gold 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 Centerra Gold, you can compare the effects of market volatilities on Orezone Gold and Centerra 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 Orezone Gold with a short position of Centerra Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Orezone Gold and Centerra Gold.
Diversification Opportunities for Orezone Gold and Centerra Gold
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Orezone and Centerra is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Orezone Gold Corp and Centerra Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Centerra Gold 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 Centerra Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Centerra Gold has no effect on the direction of Orezone Gold i.e., Orezone Gold and Centerra Gold go up and down completely randomly.
Pair Corralation between Orezone Gold and Centerra Gold
Assuming the 90 days trading horizon Orezone Gold Corp is expected to generate 2.17 times more return on investment than Centerra Gold. However, Orezone Gold is 2.17 times more volatile than Centerra Gold. It trades about 0.13 of its potential returns per unit of risk. Centerra Gold is currently generating about 0.18 per unit of risk. If you would invest 66.00 in Orezone Gold Corp on November 3, 2024 and sell it today you would earn a total of 7.00 from holding Orezone Gold Corp or generate 10.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Orezone Gold Corp vs. Centerra Gold
Performance |
| Timeline |
| Orezone Gold Corp |
| Centerra Gold |
Orezone Gold and Centerra Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Orezone Gold and Centerra Gold
The main advantage of trading using opposite Orezone Gold and Centerra Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Orezone Gold position performs unexpectedly, Centerra 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 Centerra Gold will offset losses from the drop in Centerra Gold'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 |
| Centerra Gold vs. Alamos Gold | Centerra Gold vs. NovaGold Resources | Centerra Gold vs. Eldorado Gold Corp | Centerra 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 Global Correlations module to find global opportunities by holding instruments from different markets.
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