Correlation Between Augusta Gold and Orefinders Resources

Can any of the company-specific risk be diversified away by investing in both Augusta Gold and Orefinders Resources 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 Augusta Gold and Orefinders Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Augusta Gold Corp and Orefinders Resources, you can compare the effects of market volatilities on Augusta Gold and Orefinders Resources 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 Augusta Gold with a short position of Orefinders Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Augusta Gold and Orefinders Resources.

Diversification Opportunities for Augusta Gold and Orefinders Resources

0.31

Correlation Coefficient

Augusta Gold  Orefinders Resources

Weak diversification

The 3 months correlation between Augusta and Orefinders is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Augusta Gold Corp and Orefinders Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Orefinders Resources and Augusta 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 Augusta Gold Corp are associated (or correlated) with Orefinders Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Orefinders Resources has no effect on the direction of Augusta Gold i.e., Augusta Gold and Orefinders Resources go up and down completely randomly.

Pair Corralation between Augusta Gold and Orefinders Resources

Given the investment horizon of 90 days Augusta Gold is expected to generate 1.01 times less return on investment than Orefinders Resources. In addition to that, Augusta Gold is 1.12 times more volatile than Orefinders Resources. It trades about 0.02 of its total potential returns per unit of risk. Orefinders Resources is currently generating about 0.02 per unit of volatility. If you would invest  4.35  in Orefinders Resources on December 30, 2024 and sell it today you would lose (0.08) from holding Orefinders Resources or give up 1.84% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.41%
Values	Daily Returns

Augusta Gold Corp  vs.  Orefinders Resources

Augusta Gold Corp

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Augusta Gold Corp are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable technical and fundamental indicators, Augusta Gold is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Orefinders Resources

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Orefinders Resources are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable fundamental indicators, Orefinders Resources is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Augusta Gold and Orefinders Resources

The main advantage of trading using opposite Augusta Gold and Orefinders Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Augusta Gold position performs unexpectedly, Orefinders Resources 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 Orefinders Resources will offset losses from the drop in Orefinders Resources' long position.

The idea behind Augusta Gold Corp and Orefinders Resources pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.