Correlation Between Orefinders Resources and Loncor Gold
Can any of the company-specific risk be diversified away by investing in both Orefinders Resources and Loncor 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 Orefinders Resources and Loncor Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Orefinders Resources and Loncor Gold, you can compare the effects of market volatilities on Orefinders Resources and Loncor 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 Orefinders Resources with a short position of Loncor Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Orefinders Resources and Loncor Gold.
Diversification Opportunities for Orefinders Resources and Loncor Gold
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Orefinders and Loncor is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Orefinders Resources and Loncor Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Loncor Gold 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 Loncor Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Loncor Gold has no effect on the direction of Orefinders Resources i.e., Orefinders Resources and Loncor Gold go up and down completely randomly.
Pair Corralation between Orefinders Resources and Loncor Gold
Assuming the 90 days horizon Orefinders Resources is expected to generate 1.31 times more return on investment than Loncor Gold. However, Orefinders Resources is 1.31 times more volatile than Loncor Gold. It trades about 0.04 of its potential returns per unit of risk. Loncor Gold is currently generating about 0.03 per unit of risk. If you would invest 3.32 in Orefinders Resources on October 25, 2024 and sell it today you would earn a total of 0.89 from holding Orefinders Resources or generate 26.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 23.68% |
| Values | Daily Returns |
Orefinders Resources vs. Loncor Gold
Performance |
| Timeline |
| Orefinders Resources |
| Loncor Gold |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Orefinders Resources and Loncor Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Orefinders Resources and Loncor Gold
The main advantage of trading using opposite Orefinders Resources and Loncor Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Orefinders Resources position performs unexpectedly, Loncor 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 Loncor Gold will offset losses from the drop in Loncor Gold's 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 |
| Loncor Gold vs. Galiano Gold | Loncor Gold vs. Brunswick Exploration | Loncor Gold vs. B2Gold Corp | Loncor Gold vs. Japan Gold 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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