Correlation Between Orefinders Resources and Leviathan Gold
Can any of the company-specific risk be diversified away by investing in both Orefinders Resources and Leviathan 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 Leviathan 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 Leviathan Gold, you can compare the effects of market volatilities on Orefinders Resources and Leviathan 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 Leviathan Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Orefinders Resources and Leviathan Gold.
Diversification Opportunities for Orefinders Resources and Leviathan Gold
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Orefinders and Leviathan is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Orefinders Resources and Leviathan Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Leviathan 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 Leviathan Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Leviathan Gold has no effect on the direction of Orefinders Resources i.e., Orefinders Resources and Leviathan Gold go up and down completely randomly.
Pair Corralation between Orefinders Resources and Leviathan Gold
Assuming the 90 days horizon Orefinders Resources is expected to generate 0.49 times more return on investment than Leviathan Gold. However, Orefinders Resources is 2.03 times less risky than Leviathan Gold. It trades about 0.14 of its potential returns per unit of risk. Leviathan Gold is currently generating about 0.06 per unit of risk. If you would invest 4.20 in Orefinders Resources on August 25, 2024 and sell it today you would earn a total of 0.46 from holding Orefinders Resources or generate 10.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Orefinders Resources vs. Leviathan Gold
Performance |
| Timeline |
| Orefinders Resources |
| Leviathan Gold |
Orefinders Resources and Leviathan Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Orefinders Resources and Leviathan Gold
The main advantage of trading using opposite Orefinders Resources and Leviathan Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Orefinders Resources position performs unexpectedly, Leviathan 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 Leviathan Gold will offset losses from the drop in Leviathan Gold's long position.| Orefinders Resources vs. Aurion Resources | Orefinders Resources vs. Liberty Gold Corp | Orefinders Resources vs. Rio2 Limited | Orefinders Resources vs. Orezone Gold Corp |
| Leviathan Gold vs. Aurion Resources | Leviathan Gold vs. Liberty Gold Corp | Leviathan Gold vs. Rio2 Limited | Leviathan Gold vs. Orezone 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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