Correlation Between Orezone Gold and Highland Copper
Can any of the company-specific risk be diversified away by investing in both Orezone Gold and Highland Copper 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 Highland Copper 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 Highland Copper, you can compare the effects of market volatilities on Orezone Gold and Highland Copper 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 Highland Copper. Check out your portfolio center. Please also check ongoing floating volatility patterns of Orezone Gold and Highland Copper.
Diversification Opportunities for Orezone Gold and Highland Copper
-0.09 | Correlation Coefficient |
Good diversification
The 3 months correlation between Orezone and Highland is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Orezone Gold Corp and Highland Copper in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Highland Copper 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 Highland Copper. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Highland Copper has no effect on the direction of Orezone Gold i.e., Orezone Gold and Highland Copper go up and down completely randomly.
Pair Corralation between Orezone Gold and Highland Copper
Assuming the 90 days trading horizon Orezone Gold Corp is expected to under-perform the Highland Copper. In addition to that, Orezone Gold is 1.27 times more volatile than Highland Copper. It trades about -0.02 of its total potential returns per unit of risk. Highland Copper is currently generating about 0.09 per unit of volatility. If you would invest 9.50 in Highland Copper on September 3, 2024 and sell it today you would earn a total of 0.50 from holding Highland Copper or generate 5.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.24% |
| Values | Daily Returns |
Orezone Gold Corp vs. Highland Copper
Performance |
| Timeline |
| Orezone Gold Corp |
| Highland Copper |
Orezone Gold and Highland Copper Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Orezone Gold and Highland Copper
The main advantage of trading using opposite Orezone Gold and Highland Copper positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Orezone Gold position performs unexpectedly, Highland Copper 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 Highland Copper will offset losses from the drop in Highland Copper'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 |
| Highland Copper vs. Algoma Steel Group | Highland Copper vs. Champion Iron | Highland Copper vs. International Zeolite Corp | Highland Copper vs. European Residential Real |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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