Correlation Between Ophir Gold and Gold Reserve

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

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

Diversification Opportunities for Ophir Gold and Gold Reserve

-0.74

Correlation Coefficient

Ophir Gold  Gold Reserve

Pay attention - limited upside

The 3 months correlation between Ophir and Gold is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding Ophir Gold Corp and Gold Reserve in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gold Reserve and Ophir 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 Ophir Gold Corp are associated (or correlated) with Gold Reserve. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gold Reserve has no effect on the direction of Ophir Gold i.e., Ophir Gold and Gold Reserve go up and down completely randomly.

Pair Corralation between Ophir Gold and Gold Reserve

If you would invest  39.00  in Ophir Gold Corp on October 27, 2024 and sell it today you would earn a total of  0.00  from holding Ophir Gold Corp or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	5.26%
Values	Daily Returns

Ophir Gold Corp  vs.  Gold Reserve

Ophir Gold Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Ophir Gold Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable forward indicators, Ophir Gold is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Gold Reserve

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Gold Reserve has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Ophir Gold and Gold Reserve

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

The idea behind Ophir Gold Corp and Gold Reserve 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.