Correlation Between Excellon Resources and Orla Mining
Can any of the company-specific risk be diversified away by investing in both Excellon Resources and Orla 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 Excellon Resources and Orla Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Excellon Resources and Orla Mining, you can compare the effects of market volatilities on Excellon Resources and Orla 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 Excellon Resources with a short position of Orla Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Excellon Resources and Orla Mining.
Diversification Opportunities for Excellon Resources and Orla Mining
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Excellon and Orla is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Excellon Resources and Orla Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Orla Mining and Excellon 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 Excellon Resources are associated (or correlated) with Orla Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Orla Mining has no effect on the direction of Excellon Resources i.e., Excellon Resources and Orla Mining go up and down completely randomly.
Pair Corralation between Excellon Resources and Orla Mining
Assuming the 90 days trading horizon Excellon Resources is expected to generate 2.63 times more return on investment than Orla Mining. However, Excellon Resources is 2.63 times more volatile than Orla Mining. It trades about 0.13 of its potential returns per unit of risk. Orla Mining is currently generating about 0.28 per unit of risk. If you would invest 9.00 in Excellon Resources on December 21, 2024 and sell it today you would earn a total of 5.00 from holding Excellon Resources or generate 55.56% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Excellon Resources vs. Orla Mining
Performance |
Timeline |
Excellon Resources |
Orla Mining |
Excellon Resources and Orla Mining Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Excellon Resources and Orla Mining
The main advantage of trading using opposite Excellon Resources and Orla Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Excellon Resources position performs unexpectedly, Orla 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 Orla Mining will offset losses from the drop in Orla Mining's long position.Excellon Resources vs. Minco Silver | Excellon Resources vs. Americas Silver Corp | Excellon Resources vs. IMPACT Silver Corp | Excellon Resources vs. Dolly Varden Silver |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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