Correlation Between Orezone Gold and Gold Terra

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

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

Diversification Opportunities for Orezone Gold and Gold Terra

-0.4

Correlation Coefficient

Orezone Gold  Gold Terra

Very good diversification

The 3 months correlation between Orezone and Gold is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Orezone Gold Corp and Gold Terra Resource in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gold Terra Resource and Orezone 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 Orezone Gold Corp are associated (or correlated) with Gold Terra. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gold Terra Resource has no effect on the direction of Orezone Gold i.e., Orezone Gold and Gold Terra go up and down completely randomly.

Pair Corralation between Orezone Gold and Gold Terra

Assuming the 90 days trading horizon Orezone Gold Corp is expected to generate 0.63 times more return on investment than Gold Terra. However, Orezone Gold Corp is 1.59 times less risky than Gold Terra. It trades about 0.22 of its potential returns per unit of risk. Gold Terra Resource is currently generating about 0.03 per unit of risk. If you would invest  63.00  in Orezone Gold Corp on December 29, 2024 and sell it today you would earn a total of  37.00  from holding Orezone Gold Corp or generate 58.73% return on investment over 90 days.

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

Orezone Gold Corp  vs.  Gold Terra Resource

Orezone Gold Corp

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Orezone Gold Corp are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating technical and fundamental indicators, Orezone Gold displayed solid returns over the last few months and may actually be approaching a breakup point.

Gold Terra Resource

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Gold Terra Resource are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Gold Terra may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Orezone Gold and Gold Terra

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

The idea behind Orezone Gold Corp and Gold Terra Resource 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.