Correlation Between Orezone Gold and Teck Resources
Can any of the company-specific risk be diversified away by investing in both Orezone Gold and Teck Resources 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 Teck Resources 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 Teck Resources Limited, you can compare the effects of market volatilities on Orezone Gold and Teck Resources 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 Teck Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Orezone Gold and Teck Resources.
Diversification Opportunities for Orezone Gold and Teck Resources
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Orezone and Teck is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Orezone Gold Corp and Teck Resources Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Teck Resources 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 Teck Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Teck Resources has no effect on the direction of Orezone Gold i.e., Orezone Gold and Teck Resources go up and down completely randomly.
Pair Corralation between Orezone Gold and Teck Resources
Assuming the 90 days trading horizon Orezone Gold Corp is expected to under-perform the Teck Resources. In addition to that, Orezone Gold is 1.6 times more volatile than Teck Resources Limited. It trades about -0.37 of its total potential returns per unit of risk. Teck Resources Limited is currently generating about 0.03 per unit of volatility. If you would invest 6,485 in Teck Resources Limited on August 25, 2024 and sell it today you would earn a total of 58.00 from holding Teck Resources Limited or generate 0.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Orezone Gold Corp vs. Teck Resources Limited
Performance |
| Timeline |
| Orezone Gold Corp |
| Teck Resources |
Orezone Gold and Teck Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Orezone Gold and Teck Resources
The main advantage of trading using opposite Orezone Gold and Teck Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Orezone Gold position performs unexpectedly, Teck Resources 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 Teck Resources will offset losses from the drop in Teck Resources' long position.| Orezone Gold vs. i 80 Gold Corp | Orezone Gold vs. Perseus Mining | Orezone Gold vs. K92 Mining | Orezone Gold vs. GoGold Resources |
| Teck Resources vs. First Majestic Silver | Teck Resources vs. Ivanhoe Energy | Teck Resources vs. Orezone Gold Corp | Teck Resources 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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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