Correlation Between Orezone Gold and Independence Gold
Can any of the company-specific risk be diversified away by investing in both Orezone Gold and Independence 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 Independence 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 Independence Gold Corp, you can compare the effects of market volatilities on Orezone Gold and Independence 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 Independence Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Orezone Gold and Independence Gold.
Diversification Opportunities for Orezone Gold and Independence Gold
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Orezone and Independence is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Orezone Gold Corp and Independence Gold Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Independence Gold 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 Independence Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Independence Gold Corp has no effect on the direction of Orezone Gold i.e., Orezone Gold and Independence Gold go up and down completely randomly.
Pair Corralation between Orezone Gold and Independence Gold
Assuming the 90 days trading horizon Orezone Gold Corp is expected to generate 0.86 times more return on investment than Independence Gold. However, Orezone Gold Corp is 1.17 times less risky than Independence Gold. It trades about -0.18 of its potential returns per unit of risk. Independence Gold Corp is currently generating about -0.39 per unit of risk. If you would invest 76.00 in Orezone Gold Corp on August 30, 2024 and sell it today you would lose (12.00) from holding Orezone Gold Corp or give up 15.79% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Orezone Gold Corp vs. Independence Gold Corp
Performance |
| Timeline |
| Orezone Gold Corp |
| Independence Gold Corp |
Orezone Gold and Independence Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Orezone Gold and Independence Gold
The main advantage of trading using opposite Orezone Gold and Independence Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Orezone Gold position performs unexpectedly, Independence 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 Independence Gold will offset losses from the drop in Independence 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 |
| Independence Gold vs. Kesselrun Resources | Independence Gold vs. Altiplano Metals | Independence Gold vs. Rockhaven Resources | Independence Gold vs. Magnum Goldcorp |
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 Stocks Directory module to find actively traded stocks across global markets.
Other Complementary Tools
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| Commodity Directory Find actively traded commodities issued by global exchanges |