Correlation Between Outcrop Gold and Orbit Garant

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

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

Diversification Opportunities for Outcrop Gold and Orbit Garant

-0.46

Correlation Coefficient

Outcrop Gold  Orbit Garant

Very good diversification

The 3 months correlation between Outcrop and Orbit is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Outcrop Gold Corp and Orbit Garant Drilling in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Orbit Garant Drilling and Outcrop 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 Outcrop Gold Corp are associated (or correlated) with Orbit Garant. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Orbit Garant Drilling has no effect on the direction of Outcrop Gold i.e., Outcrop Gold and Orbit Garant go up and down completely randomly.

Pair Corralation between Outcrop Gold and Orbit Garant

Assuming the 90 days horizon Outcrop Gold Corp is expected to under-perform the Orbit Garant. In addition to that, Outcrop Gold is 1.18 times more volatile than Orbit Garant Drilling. It trades about -0.08 of its total potential returns per unit of risk. Orbit Garant Drilling is currently generating about -0.08 per unit of volatility. If you would invest  85.00  in Orbit Garant Drilling on September 23, 2024 and sell it today you would lose (6.00) from holding Orbit Garant Drilling or give up 7.06% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Outcrop Gold Corp  vs.  Orbit Garant Drilling

Outcrop Gold Corp

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Outcrop Gold Corp are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of fairly stable basic indicators, Outcrop Gold is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Orbit Garant Drilling

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Orbit Garant Drilling are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of very abnormal fundamental indicators, Orbit Garant displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Outcrop Gold and Orbit Garant

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

The idea behind Outcrop Gold Corp and Orbit Garant Drilling 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.