Correlation Between Orefinders Resources and GFG Resources
Can any of the company-specific risk be diversified away by investing in both Orefinders Resources and GFG 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 Orefinders Resources and GFG Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Orefinders Resources and GFG Resources, you can compare the effects of market volatilities on Orefinders Resources and GFG 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 Orefinders Resources with a short position of GFG Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Orefinders Resources and GFG Resources.
Diversification Opportunities for Orefinders Resources and GFG Resources
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Orefinders and GFG is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Orefinders Resources and GFG Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GFG Resources and Orefinders Resources 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 Orefinders Resources are associated (or correlated) with GFG Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GFG Resources has no effect on the direction of Orefinders Resources i.e., Orefinders Resources and GFG Resources go up and down completely randomly.
Pair Corralation between Orefinders Resources and GFG Resources
Assuming the 90 days horizon Orefinders Resources is expected to generate 0.88 times more return on investment than GFG Resources. However, Orefinders Resources is 1.14 times less risky than GFG Resources. It trades about 0.15 of its potential returns per unit of risk. GFG Resources is currently generating about 0.1 per unit of risk. If you would invest 3.90 in Orefinders Resources on August 29, 2024 and sell it today you would earn a total of 1.10 from holding Orefinders Resources or generate 28.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Orefinders Resources vs. GFG Resources
Performance |
| Timeline |
| Orefinders Resources |
| GFG Resources |
Orefinders Resources and GFG Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Orefinders Resources and GFG Resources
The main advantage of trading using opposite Orefinders Resources and GFG Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Orefinders Resources position performs unexpectedly, GFG 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 GFG Resources will offset losses from the drop in GFG Resources' long position.| Orefinders Resources vs. Lavras Gold Corp | Orefinders Resources vs. TRU Precious Metals | Orefinders Resources vs. North Peak Resources | Orefinders Resources vs. Nine Mile Metals |
| GFG Resources vs. Japan Gold Corp | GFG Resources vs. Robex Resources | GFG Resources vs. Rover Metals Corp | GFG Resources vs. Orefinders Resources |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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