Correlation Between Orbit Garant and Magnum Goldcorp
Can any of the company-specific risk be diversified away by investing in both Orbit Garant and Magnum Goldcorp 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 Orbit Garant and Magnum Goldcorp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Orbit Garant Drilling and Magnum Goldcorp, you can compare the effects of market volatilities on Orbit Garant and Magnum Goldcorp 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 Orbit Garant with a short position of Magnum Goldcorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Orbit Garant and Magnum Goldcorp.
Diversification Opportunities for Orbit Garant and Magnum Goldcorp
-0.19 | Correlation Coefficient |
Good diversification
The 3 months correlation between Orbit and Magnum is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Orbit Garant Drilling and Magnum Goldcorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Magnum Goldcorp and Orbit Garant 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 Orbit Garant Drilling are associated (or correlated) with Magnum Goldcorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Magnum Goldcorp has no effect on the direction of Orbit Garant i.e., Orbit Garant and Magnum Goldcorp go up and down completely randomly.
Pair Corralation between Orbit Garant and Magnum Goldcorp
Assuming the 90 days trading horizon Orbit Garant Drilling is expected to generate 0.19 times more return on investment than Magnum Goldcorp. However, Orbit Garant Drilling is 5.36 times less risky than Magnum Goldcorp. It trades about 0.03 of its potential returns per unit of risk. Magnum Goldcorp is currently generating about 0.0 per unit of risk. If you would invest 80.00 in Orbit Garant Drilling on October 11, 2024 and sell it today you would earn a total of 1.00 from holding Orbit Garant Drilling or generate 1.25% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 97.56% |
Values | Daily Returns |
Orbit Garant Drilling vs. Magnum Goldcorp
Performance |
Timeline |
Orbit Garant Drilling |
Magnum Goldcorp |
Orbit Garant and Magnum Goldcorp Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Orbit Garant and Magnum Goldcorp
The main advantage of trading using opposite Orbit Garant and Magnum Goldcorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Orbit Garant position performs unexpectedly, Magnum Goldcorp 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 Magnum Goldcorp will offset losses from the drop in Magnum Goldcorp's long position.Orbit Garant vs. Foraco International SA | Orbit Garant vs. Geodrill Limited | Orbit Garant vs. Major Drilling Group | Orbit Garant vs. Mccoy Global |
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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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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