Correlation Between Orezone Gold and Kodiak Copper
Can any of the company-specific risk be diversified away by investing in both Orezone Gold and Kodiak 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 Kodiak 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 Kodiak Copper Corp, you can compare the effects of market volatilities on Orezone Gold and Kodiak 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 Kodiak Copper. Check out your portfolio center. Please also check ongoing floating volatility patterns of Orezone Gold and Kodiak Copper.
Diversification Opportunities for Orezone Gold and Kodiak Copper
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Orezone and Kodiak is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Orezone Gold Corp and Kodiak Copper Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kodiak Copper 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 Kodiak Copper. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kodiak Copper Corp has no effect on the direction of Orezone Gold i.e., Orezone Gold and Kodiak Copper go up and down completely randomly.
Pair Corralation between Orezone Gold and Kodiak Copper
Assuming the 90 days trading horizon Orezone Gold Corp is expected to under-perform the Kodiak Copper. In addition to that, Orezone Gold is 1.49 times more volatile than Kodiak Copper Corp. It trades about -0.18 of its total potential returns per unit of risk. Kodiak Copper Corp is currently generating about -0.19 per unit of volatility. If you would invest 46.00 in Kodiak Copper Corp on August 29, 2024 and sell it today you would lose (5.00) from holding Kodiak Copper Corp or give up 10.87% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Orezone Gold Corp vs. Kodiak Copper Corp
Performance |
| Timeline |
| Orezone Gold Corp |
| Kodiak Copper Corp |
Orezone Gold and Kodiak Copper Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Orezone Gold and Kodiak Copper
The main advantage of trading using opposite Orezone Gold and Kodiak Copper positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Orezone Gold position performs unexpectedly, Kodiak 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 Kodiak Copper will offset losses from the drop in Kodiak Copper's long position.The idea behind Orezone Gold Corp and Kodiak Copper 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.| Kodiak Copper vs. First Majestic Silver | Kodiak Copper vs. Ivanhoe Energy | Kodiak Copper vs. Orezone Gold Corp | Kodiak Copper 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 CEOs Directory module to screen CEOs from public companies around the world.
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