Correlation Between Dacian Gold and Orefinders Resources

Can any of the company-specific risk be diversified away by investing in both Dacian 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 Dacian 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 Dacian Gold Limited and Orefinders Resources, you can compare the effects of market volatilities on Dacian 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 Dacian Gold with a short position of Orefinders Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dacian Gold and Orefinders Resources.

Diversification Opportunities for Dacian Gold and Orefinders Resources

-0.57

Correlation Coefficient

Dacian Gold  Orefinders Resources

Excellent diversification

The 3 months correlation between Dacian and Orefinders is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Dacian Gold Limited and Orefinders Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Orefinders Resources and Dacian 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 Dacian Gold Limited 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 Dacian Gold i.e., Dacian Gold and Orefinders Resources go up and down completely randomly.

Pair Corralation between Dacian Gold and Orefinders Resources

Assuming the 90 days horizon Dacian Gold is expected to generate 1.77 times less return on investment than Orefinders Resources. But when comparing it to its historical volatility, Dacian Gold Limited is 2.45 times less risky than Orefinders Resources. It trades about 0.06 of its potential returns per unit of risk. Orefinders Resources is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  2.89  in Orefinders Resources on October 4, 2024 and sell it today you would earn a total of  1.52  from holding Orefinders Resources or generate 52.6% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	26.46%
Values	Daily Returns

Dacian Gold Limited  vs.  Orefinders Resources

Dacian Gold Limited

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Dacian Gold Limited has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Dacian 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

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Orefinders Resources are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile fundamental indicators, Orefinders Resources may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Dacian Gold and Orefinders Resources

The main advantage of trading using opposite Dacian Gold and Orefinders Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dacian 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 Dacian Gold Limited 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.

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 Commodity Directory module to find actively traded commodities issued by global exchanges.