Correlation Between Orezone Gold and Lomiko Metals
Can any of the company-specific risk be diversified away by investing in both Orezone Gold and Lomiko 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 Lomiko 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 Lomiko Metals, you can compare the effects of market volatilities on Orezone Gold and Lomiko 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 Lomiko Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Orezone Gold and Lomiko Metals.
Diversification Opportunities for Orezone Gold and Lomiko Metals
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between Orezone and Lomiko is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Orezone Gold Corp and Lomiko Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lomiko 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 Lomiko Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lomiko Metals has no effect on the direction of Orezone Gold i.e., Orezone Gold and Lomiko Metals go up and down completely randomly.
Pair Corralation between Orezone Gold and Lomiko Metals
Assuming the 90 days trading horizon Orezone Gold Corp is expected to generate 1.01 times more return on investment than Lomiko Metals. However, Orezone Gold is 1.01 times more volatile than Lomiko Metals. It trades about -0.04 of its potential returns per unit of risk. Lomiko Metals is currently generating about -0.25 per unit of risk. If you would invest 75.00 in Orezone Gold Corp on September 2, 2024 and sell it today you would lose (4.00) from holding Orezone Gold Corp or give up 5.33% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Orezone Gold Corp vs. Lomiko Metals
Performance |
| Timeline |
| Orezone Gold Corp |
| Lomiko Metals |
Orezone Gold and Lomiko Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Orezone Gold and Lomiko Metals
The main advantage of trading using opposite Orezone Gold and Lomiko Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Orezone Gold position performs unexpectedly, Lomiko 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 Lomiko Metals will offset losses from the drop in Lomiko 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 |
| Lomiko Metals vs. Osisko Metals | Lomiko Metals vs. Xtract One Technologies | Lomiko Metals vs. Enduro Metals Corp | Lomiko Metals vs. Ocumetics Technology 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 Global Correlations module to find global opportunities by holding instruments from different markets.
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