Correlation Between Orezone Gold and Patagonia Gold
Can any of the company-specific risk be diversified away by investing in both Orezone Gold and Patagonia 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 Patagonia 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 Patagonia Gold Corp, you can compare the effects of market volatilities on Orezone Gold and Patagonia 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 Patagonia Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Orezone Gold and Patagonia Gold.
Diversification Opportunities for Orezone Gold and Patagonia Gold
-0.09 | Correlation Coefficient |
Good diversification
The 3 months correlation between Orezone and Patagonia is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Orezone Gold Corp and Patagonia Gold Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Patagonia 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 Patagonia Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Patagonia Gold Corp has no effect on the direction of Orezone Gold i.e., Orezone Gold and Patagonia Gold go up and down completely randomly.
Pair Corralation between Orezone Gold and Patagonia Gold
Assuming the 90 days trading horizon Orezone Gold Corp is expected to under-perform the Patagonia Gold. But the stock apears to be less risky and, when comparing its historical volatility, Orezone Gold Corp is 3.6 times less risky than Patagonia Gold. The stock trades about -0.02 of its potential returns per unit of risk. The Patagonia Gold Corp is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 3.00 in Patagonia Gold Corp on August 25, 2024 and sell it today you would earn a total of 0.50 from holding Patagonia Gold Corp or generate 16.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Orezone Gold Corp vs. Patagonia Gold Corp
Performance |
| Timeline |
| Orezone Gold Corp |
| Patagonia Gold Corp |
Orezone Gold and Patagonia Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Orezone Gold and Patagonia Gold
The main advantage of trading using opposite Orezone Gold and Patagonia Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Orezone Gold position performs unexpectedly, Patagonia 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 Patagonia Gold will offset losses from the drop in Patagonia 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 |
| Patagonia Gold vs. First Majestic Silver | Patagonia Gold vs. Ivanhoe Energy | Patagonia Gold vs. Orezone Gold Corp | Patagonia Gold 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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