Correlation Between Orezone Gold and Labrador Gold
Can any of the company-specific risk be diversified away by investing in both Orezone Gold and Labrador 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 Labrador 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 Labrador Gold Corp, you can compare the effects of market volatilities on Orezone Gold and Labrador 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 Labrador Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Orezone Gold and Labrador Gold.
Diversification Opportunities for Orezone Gold and Labrador Gold
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Orezone and Labrador is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Orezone Gold Corp and Labrador Gold Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Labrador 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 Labrador Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Labrador Gold Corp has no effect on the direction of Orezone Gold i.e., Orezone Gold and Labrador Gold go up and down completely randomly.
Pair Corralation between Orezone Gold and Labrador Gold
Assuming the 90 days horizon Orezone Gold Corp is expected to under-perform the Labrador Gold. But the otc stock apears to be less risky and, when comparing its historical volatility, Orezone Gold Corp is 1.7 times less risky than Labrador Gold. The otc stock trades about -0.19 of its potential returns per unit of risk. The Labrador Gold Corp is currently generating about -0.08 of returns per unit of risk over similar time horizon. If you would invest 5.15 in Labrador Gold Corp on August 30, 2024 and sell it today you would lose (0.65) from holding Labrador Gold Corp or give up 12.62% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Orezone Gold Corp vs. Labrador Gold Corp
Performance |
| Timeline |
| Orezone Gold Corp |
| Labrador Gold Corp |
Orezone Gold and Labrador Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Orezone Gold and Labrador Gold
The main advantage of trading using opposite Orezone Gold and Labrador Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Orezone Gold position performs unexpectedly, Labrador 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 Labrador Gold will offset losses from the drop in Labrador 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 |
| Labrador Gold vs. Exploits Discovery Corp | Labrador Gold vs. Mako Mining Corp | Labrador Gold vs. Puma Exploration | Labrador Gold vs. Aurion 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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