Correlation Between Orezone Gold and Cobalt Power
Can any of the company-specific risk be diversified away by investing in both Orezone Gold and Cobalt Power 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 Cobalt Power 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 Cobalt Power Group, you can compare the effects of market volatilities on Orezone Gold and Cobalt Power 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 Cobalt Power. Check out your portfolio center. Please also check ongoing floating volatility patterns of Orezone Gold and Cobalt Power.
Diversification Opportunities for Orezone Gold and Cobalt Power
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Orezone and Cobalt is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Orezone Gold Corp and Cobalt Power Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cobalt Power Group 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 Cobalt Power. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cobalt Power Group has no effect on the direction of Orezone Gold i.e., Orezone Gold and Cobalt Power go up and down completely randomly.
Pair Corralation between Orezone Gold and Cobalt Power
Assuming the 90 days trading horizon Orezone Gold Corp is expected to generate 0.99 times more return on investment than Cobalt Power. However, Orezone Gold Corp is 1.01 times less risky than Cobalt Power. It trades about 0.29 of its potential returns per unit of risk. Cobalt Power Group is currently generating about -0.22 per unit of risk. If you would invest 67.00 in Orezone Gold Corp on November 27, 2024 and sell it today you would earn a total of 15.00 from holding Orezone Gold Corp or generate 22.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Orezone Gold Corp vs. Cobalt Power Group
Performance |
| Timeline |
| Orezone Gold Corp |
| Cobalt Power Group |
Orezone Gold and Cobalt Power Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Orezone Gold and Cobalt Power
The main advantage of trading using opposite Orezone Gold and Cobalt Power positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Orezone Gold position performs unexpectedly, Cobalt Power 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 Cobalt Power will offset losses from the drop in Cobalt Power'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 |
| Cobalt Power vs. Queens Road Capital | Cobalt Power vs. MTY Food Group | Cobalt Power vs. Verizon Communications CDR | Cobalt Power vs. Network Media Group |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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