Correlation Between Omineca Mining and Independence Gold

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

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

Diversification Opportunities for Omineca Mining and Independence Gold

0.05

Correlation Coefficient

Omineca Mining  Independence Gold

Significant diversification

The 3 months correlation between Omineca and Independence is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Omineca Mining and and Independence Gold Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Independence Gold Corp and Omineca 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 Omineca Mining and are associated (or correlated) with Independence Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Independence Gold Corp has no effect on the direction of Omineca Mining i.e., Omineca Mining and Independence Gold go up and down completely randomly.

Pair Corralation between Omineca Mining and Independence Gold

Assuming the 90 days horizon Omineca Mining and is expected to generate 1.85 times more return on investment than Independence Gold. However, Omineca Mining is 1.85 times more volatile than Independence Gold Corp. It trades about 0.23 of its potential returns per unit of risk. Independence Gold Corp is currently generating about -0.13 per unit of risk. If you would invest  3.37  in Omineca Mining and on October 9, 2024 and sell it today you would earn a total of  1.72  from holding Omineca Mining and or generate 51.04% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Omineca Mining and  vs.  Independence Gold Corp

Omineca Mining

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Omineca Mining and are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite nearly unfluctuating basic indicators, Omineca Mining reported solid returns over the last few months and may actually be approaching a breakup point.

Independence Gold Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Independence Gold Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable fundamental indicators, Independence Gold is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Omineca Mining and Independence Gold

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

The idea behind Omineca Mining and and Independence Gold Corp 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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.