Correlation Between Norsemont Mining and Omineca Mining

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

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

Diversification Opportunities for Norsemont Mining and Omineca Mining

0.17

Correlation Coefficient

Norsemont Mining  Omineca Mining

Average diversification

The 3 months correlation between Norsemont and Omineca is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Norsemont Mining and Omineca Mining and in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Omineca Mining and Norsemont Mining 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 Norsemont Mining are associated (or correlated) with Omineca Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Omineca Mining has no effect on the direction of Norsemont Mining i.e., Norsemont Mining and Omineca Mining go up and down completely randomly.

Pair Corralation between Norsemont Mining and Omineca Mining

Assuming the 90 days horizon Norsemont Mining is expected to under-perform the Omineca Mining. But the pink sheet apears to be less risky and, when comparing its historical volatility, Norsemont Mining is 1.37 times less risky than Omineca Mining. The pink sheet trades about -0.09 of its potential returns per unit of risk. The Omineca Mining and is currently generating about -0.05 of returns per unit of risk over similar time horizon. If you would invest  4.58  in Omineca Mining and on November 19, 2024 and sell it today you would lose (1.58) from holding Omineca Mining and or give up 34.5% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	98.36%
Values	Daily Returns

Norsemont Mining  vs.  Omineca Mining and

Norsemont Mining

Risk-Adjusted Performance

Very Weak

Over the last 90 days Norsemont Mining 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 March 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Omineca Mining

Risk-Adjusted Performance

Very Weak

Over the last 90 days Omineca Mining and 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 March 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Norsemont Mining and Omineca Mining

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

The idea behind Norsemont Mining and Omineca Mining and 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 Transaction History module to view history of all your transactions and understand their impact on performance.