Correlation Between Orezone Gold and Signal Gold
Can any of the company-specific risk be diversified away by investing in both Orezone Gold and Signal 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 Signal 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 Signal Gold, you can compare the effects of market volatilities on Orezone Gold and Signal 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 Signal Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Orezone Gold and Signal Gold.
Diversification Opportunities for Orezone Gold and Signal Gold
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Orezone and Signal is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Orezone Gold Corp and Signal Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Signal Gold 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 Signal Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Signal Gold has no effect on the direction of Orezone Gold i.e., Orezone Gold and Signal Gold go up and down completely randomly.
Pair Corralation between Orezone Gold and Signal Gold
Assuming the 90 days trading horizon Orezone Gold Corp is expected to under-perform the Signal Gold. But the stock apears to be less risky and, when comparing its historical volatility, Orezone Gold Corp is 1.51 times less risky than Signal Gold. The stock trades about -0.18 of its potential returns per unit of risk. The Signal Gold is currently generating about -0.11 of returns per unit of risk over similar time horizon. If you would invest 9.00 in Signal Gold on August 31, 2024 and sell it today you would lose (1.50) from holding Signal Gold or give up 16.67% 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. Signal Gold
Performance |
| Timeline |
| Orezone Gold Corp |
| Signal Gold |
Orezone Gold and Signal Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Orezone Gold and Signal Gold
The main advantage of trading using opposite Orezone Gold and Signal Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Orezone Gold position performs unexpectedly, Signal 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 Signal Gold will offset losses from the drop in Signal 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 |
| Signal Gold vs. Montage Gold Corp | Signal Gold vs. Cerrado Gold Corp | Signal Gold vs. Steppe Gold | Signal Gold vs. Maritime Resources 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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