Correlation Between Canagold Resources and Orvana Minerals

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

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

Diversification Opportunities for Canagold Resources and Orvana Minerals

0.67

Correlation Coefficient

Canagold Resources  Orvana Minerals

Poor diversification

The 3 months correlation between Canagold and Orvana is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Canagold Resources and Orvana Minerals Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Orvana Minerals Corp and Canagold 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 Canagold Resources are associated (or correlated) with Orvana Minerals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Orvana Minerals Corp has no effect on the direction of Canagold Resources i.e., Canagold Resources and Orvana Minerals go up and down completely randomly.

Pair Corralation between Canagold Resources and Orvana Minerals

Assuming the 90 days trading horizon Canagold Resources is expected to generate 1.57 times less return on investment than Orvana Minerals. But when comparing it to its historical volatility, Canagold Resources is 1.52 times less risky than Orvana Minerals. It trades about 0.05 of its potential returns per unit of risk. Orvana Minerals Corp is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  18.00  in Orvana Minerals Corp on December 2, 2024 and sell it today you would earn a total of  12.00  from holding Orvana Minerals Corp or generate 66.67% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Canagold Resources  vs.  Orvana Minerals Corp

Canagold Resources

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Canagold Resources are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating primary indicators, Canagold Resources displayed solid returns over the last few months and may actually be approaching a breakup point.

Orvana Minerals Corp

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Orvana Minerals Corp are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of very abnormal basic indicators, Orvana Minerals displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Canagold Resources and Orvana Minerals

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

The idea behind Canagold Resources and Orvana Minerals Corp 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.