Correlation Between Orezone Gold and Mayfair Gold
Can any of the company-specific risk be diversified away by investing in both Orezone Gold and Mayfair 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 Mayfair 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 Mayfair Gold Corp, you can compare the effects of market volatilities on Orezone Gold and Mayfair 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 Mayfair Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Orezone Gold and Mayfair Gold.
Diversification Opportunities for Orezone Gold and Mayfair Gold
0.29 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Orezone and Mayfair is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Orezone Gold Corp and Mayfair Gold Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mayfair Gold Corp 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 Mayfair Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mayfair Gold Corp has no effect on the direction of Orezone Gold i.e., Orezone Gold and Mayfair Gold go up and down completely randomly.
Pair Corralation between Orezone Gold and Mayfair Gold
Assuming the 90 days horizon Orezone Gold Corp is expected to generate 1.87 times more return on investment than Mayfair Gold. However, Orezone Gold is 1.87 times more volatile than Mayfair Gold Corp. It trades about -0.08 of its potential returns per unit of risk. Mayfair Gold Corp is currently generating about -0.46 per unit of risk. If you would invest 55.00 in Orezone Gold Corp on August 31, 2024 and sell it today you would lose (5.00) from holding Orezone Gold Corp or give up 9.09% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Orezone Gold Corp vs. Mayfair Gold Corp
Performance |
| Timeline |
| Orezone Gold Corp |
| Mayfair Gold Corp |
Orezone Gold and Mayfair Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Orezone Gold and Mayfair Gold
The main advantage of trading using opposite Orezone Gold and Mayfair Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Orezone Gold position performs unexpectedly, Mayfair 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 Mayfair Gold will offset losses from the drop in Mayfair Gold's long position.| Orezone Gold vs. Aurion Resources | Orezone Gold vs. Minera Alamos | Orezone Gold vs. Rio2 Limited | Orezone Gold vs. Roscan Gold Corp |
| Mayfair Gold vs. Agnico Eagle Mines | Mayfair Gold vs. B2Gold Corp | Mayfair Gold vs. Pan American Silver | Mayfair Gold vs. Gold Fields Ltd |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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