Correlation Between Orezone Gold and Calibre Mining
Can any of the company-specific risk be diversified away by investing in both Orezone Gold and Calibre Mining 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 Calibre Mining 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 Calibre Mining Corp, you can compare the effects of market volatilities on Orezone Gold and Calibre Mining 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 Calibre Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Orezone Gold and Calibre Mining.
Diversification Opportunities for Orezone Gold and Calibre Mining
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Orezone and Calibre is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Orezone Gold Corp and Calibre Mining Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Calibre Mining 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 Calibre Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Calibre Mining Corp has no effect on the direction of Orezone Gold i.e., Orezone Gold and Calibre Mining go up and down completely randomly.
Pair Corralation between Orezone Gold and Calibre Mining
Assuming the 90 days trading horizon Orezone Gold Corp is expected to under-perform the Calibre Mining. In addition to that, Orezone Gold is 1.38 times more volatile than Calibre Mining Corp. It trades about -0.18 of its total potential returns per unit of risk. Calibre Mining Corp is currently generating about -0.06 per unit of volatility. If you would invest 255.00 in Calibre Mining Corp on August 29, 2024 and sell it today you would lose (11.00) from holding Calibre Mining Corp or give up 4.31% 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. Calibre Mining Corp
Performance |
| Timeline |
| Orezone Gold Corp |
| Calibre Mining Corp |
Orezone Gold and Calibre Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Orezone Gold and Calibre Mining
The main advantage of trading using opposite Orezone Gold and Calibre Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Orezone Gold position performs unexpectedly, Calibre Mining 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 Calibre Mining will offset losses from the drop in Calibre Mining's long position.The idea behind Orezone Gold Corp and Calibre Mining Corp pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.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.
Other Complementary Tools
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA |