Correlation Between Orezone Gold and Lithium South
Can any of the company-specific risk be diversified away by investing in both Orezone Gold and Lithium South 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 Lithium South 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 Lithium South Development, you can compare the effects of market volatilities on Orezone Gold and Lithium South 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 Lithium South. Check out your portfolio center. Please also check ongoing floating volatility patterns of Orezone Gold and Lithium South.
Diversification Opportunities for Orezone Gold and Lithium South
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Orezone and Lithium is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Orezone Gold Corp and Lithium South Development in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lithium South Development 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 Lithium South. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lithium South Development has no effect on the direction of Orezone Gold i.e., Orezone Gold and Lithium South go up and down completely randomly.
Pair Corralation between Orezone Gold and Lithium South
Assuming the 90 days trading horizon Orezone Gold Corp is expected to generate 0.6 times more return on investment than Lithium South. However, Orezone Gold Corp is 1.66 times less risky than Lithium South. It trades about -0.02 of its potential returns per unit of risk. Lithium South Development is currently generating about -0.05 per unit of risk. If you would invest 123.00 in Orezone Gold Corp on August 31, 2024 and sell it today you would lose (52.00) from holding Orezone Gold Corp or give up 42.28% 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. Lithium South Development
Performance |
| Timeline |
| Orezone Gold Corp |
| Lithium South Development |
Orezone Gold and Lithium South Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Orezone Gold and Lithium South
The main advantage of trading using opposite Orezone Gold and Lithium South positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Orezone Gold position performs unexpectedly, Lithium South 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 Lithium South will offset losses from the drop in Lithium South'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 |
| Lithium South vs. Solar Alliance Energy | Lithium South vs. Global X Active | Lithium South vs. Financial 15 Split | Lithium South vs. Rubicon Organics |
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 Anywhere module to track or share privately all of your investments from the convenience of any device.
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