Correlation Between ODYSSEY GOLD and Compagnie Financire

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

By analyzing existing cross correlation between ODYSSEY GOLD LTD and Compagnie Financire Richemont, you can compare the effects of market volatilities on ODYSSEY GOLD and Compagnie Financire 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 ODYSSEY GOLD with a short position of Compagnie Financire. Check out your portfolio center. Please also check ongoing floating volatility patterns of ODYSSEY GOLD and Compagnie Financire.

Diversification Opportunities for ODYSSEY GOLD and Compagnie Financire

-0.3

Correlation Coefficient

ODYSSEY GOLD  Compagnie Financire

Very good diversification

The 3 months correlation between ODYSSEY and Compagnie is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding ODYSSEY GOLD LTD and Compagnie Financire Richemont in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Compagnie Financire and ODYSSEY 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 ODYSSEY GOLD LTD are associated (or correlated) with Compagnie Financire. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Compagnie Financire has no effect on the direction of ODYSSEY GOLD i.e., ODYSSEY GOLD and Compagnie Financire go up and down completely randomly.

Pair Corralation between ODYSSEY GOLD and Compagnie Financire

Assuming the 90 days horizon ODYSSEY GOLD LTD is expected to generate 5.09 times more return on investment than Compagnie Financire. However, ODYSSEY GOLD is 5.09 times more volatile than Compagnie Financire Richemont. It trades about 0.04 of its potential returns per unit of risk. Compagnie Financire Richemont is currently generating about 0.02 per unit of risk. If you would invest  2.30  in ODYSSEY GOLD LTD on October 5, 2024 and sell it today you would lose (1.45) from holding ODYSSEY GOLD LTD or give up 63.04% of portfolio value over 90 days.

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

ODYSSEY GOLD LTD  vs.  Compagnie Financire Richemont

ODYSSEY GOLD LTD

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ODYSSEY GOLD LTD 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.

Compagnie Financire

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Compagnie Financire Richemont are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, Compagnie Financire is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with ODYSSEY GOLD and Compagnie Financire

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

The idea behind ODYSSEY GOLD LTD and Compagnie Financire Richemont 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.