Correlation Between Orezone Gold and International Metals
Can any of the company-specific risk be diversified away by investing in both Orezone Gold and International Metals 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 International Metals 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 International Metals Mining, you can compare the effects of market volatilities on Orezone Gold and International Metals 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 International Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Orezone Gold and International Metals.
Diversification Opportunities for Orezone Gold and International Metals
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Orezone and International is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Orezone Gold Corp and International Metals Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on International Metals 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 International Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of International Metals has no effect on the direction of Orezone Gold i.e., Orezone Gold and International Metals go up and down completely randomly.
Pair Corralation between Orezone Gold and International Metals
Assuming the 90 days trading horizon Orezone Gold Corp is expected to under-perform the International Metals. But the stock apears to be less risky and, when comparing its historical volatility, Orezone Gold Corp is 3.25 times less risky than International Metals. The stock trades about -0.02 of its potential returns per unit of risk. The International Metals Mining is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 34.00 in International Metals Mining on September 23, 2024 and sell it today you would lose (27.00) from holding International Metals Mining or give up 79.41% 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. International Metals Mining
Performance |
| Timeline |
| Orezone Gold Corp |
| International Metals |
Orezone Gold and International Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Orezone Gold and International Metals
The main advantage of trading using opposite Orezone Gold and International Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Orezone Gold position performs unexpectedly, International Metals 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 International Metals will offset losses from the drop in International Metals' long position.| Orezone Gold vs. i 80 Gold Corp | Orezone Gold vs. Perseus Mining | Orezone Gold vs. K92 Mining | Orezone Gold vs. GoGold Resources |
| International Metals vs. First Majestic Silver | International Metals vs. Ivanhoe Energy | International Metals vs. Orezone Gold Corp | International Metals vs. Faraday Copper Corp |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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