Correlation Between Orezone Gold and Zhaojin Mining
Can any of the company-specific risk be diversified away by investing in both Orezone Gold and Zhaojin Mining 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 Zhaojin Mining 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 Zhaojin Mining Industry, you can compare the effects of market volatilities on Orezone Gold and Zhaojin Mining 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 Zhaojin Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Orezone Gold and Zhaojin Mining.
Diversification Opportunities for Orezone Gold and Zhaojin Mining
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Orezone and Zhaojin is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Orezone Gold Corp and Zhaojin Mining Industry in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zhaojin Mining Industry 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 Zhaojin Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zhaojin Mining Industry has no effect on the direction of Orezone Gold i.e., Orezone Gold and Zhaojin Mining go up and down completely randomly.
Pair Corralation between Orezone Gold and Zhaojin Mining
Assuming the 90 days horizon Orezone Gold Corp is expected to under-perform the Zhaojin Mining. In addition to that, Orezone Gold is 1.07 times more volatile than Zhaojin Mining Industry. It trades about -0.19 of its total potential returns per unit of risk. Zhaojin Mining Industry is currently generating about -0.1 per unit of volatility. If you would invest 160.00 in Zhaojin Mining Industry on August 30, 2024 and sell it today you would lose (12.00) from holding Zhaojin Mining Industry or give up 7.5% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Orezone Gold Corp vs. Zhaojin Mining Industry
Performance |
| Timeline |
| Orezone Gold Corp |
| Zhaojin Mining Industry |
Orezone Gold and Zhaojin Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Orezone Gold and Zhaojin Mining
The main advantage of trading using opposite Orezone Gold and Zhaojin Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Orezone Gold position performs unexpectedly, Zhaojin Mining 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 Zhaojin Mining will offset losses from the drop in Zhaojin Mining's long position.| Orezone Gold vs. Aurion Resources | Orezone Gold vs. Minera Alamos | Orezone Gold vs. Rio2 Limited | Orezone Gold vs. Roscan Gold Corp |
| Zhaojin Mining vs. Franco Nevada | Zhaojin Mining vs. Wheaton Precious Metals | Zhaojin Mining vs. Seabridge Gold | Zhaojin Mining vs. Osisko Gold Ro |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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