Correlation Between Mirasol Resources and Orex Minerals

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

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

Diversification Opportunities for Mirasol Resources and Orex Minerals

-0.19

Correlation Coefficient

Mirasol Resources  Orex Minerals

Good diversification

The 3 months correlation between Mirasol and Orex is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Mirasol Resources and Orex Minerals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Orex Minerals and Mirasol 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 Mirasol Resources are associated (or correlated) with Orex Minerals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Orex Minerals has no effect on the direction of Mirasol Resources i.e., Mirasol Resources and Orex Minerals go up and down completely randomly.

Pair Corralation between Mirasol Resources and Orex Minerals

Assuming the 90 days horizon Mirasol Resources is expected to generate 31.09 times less return on investment than Orex Minerals. But when comparing it to its historical volatility, Mirasol Resources is 9.23 times less risky than Orex Minerals. It trades about 0.01 of its potential returns per unit of risk. Orex Minerals is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  40.00  in Orex Minerals on September 13, 2024 and sell it today you would lose (28.00) from holding Orex Minerals or give up 70.0% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	99.8%
Values	Daily Returns

Mirasol Resources  vs.  Orex Minerals

Mirasol Resources

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Mirasol Resources are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Mirasol Resources showed solid returns over the last few months and may actually be approaching a breakup point.

Orex Minerals

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Orex Minerals has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in January 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Pair Trading with Mirasol Resources and Orex Minerals

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

The idea behind Mirasol Resources and Orex Minerals 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..