Correlation Between Orestone Mining and XXIX Metal

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

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

Diversification Opportunities for Orestone Mining and XXIX Metal

0.57

Correlation Coefficient

Orestone Mining  XXIX Metal

Very weak diversification

The 3 months correlation between Orestone and XXIX is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Orestone Mining Corp and XXIX Metal Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on XXIX Metal Corp and Orestone 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 Orestone Mining Corp are associated (or correlated) with XXIX Metal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of XXIX Metal Corp has no effect on the direction of Orestone Mining i.e., Orestone Mining and XXIX Metal go up and down completely randomly.

Pair Corralation between Orestone Mining and XXIX Metal

Assuming the 90 days horizon Orestone Mining Corp is expected to generate 1.91 times more return on investment than XXIX Metal. However, Orestone Mining is 1.91 times more volatile than XXIX Metal Corp. It trades about 0.03 of its potential returns per unit of risk. XXIX Metal Corp is currently generating about 0.02 per unit of risk. If you would invest  5.00  in Orestone Mining Corp on October 5, 2024 and sell it today you would lose (2.00) from holding Orestone Mining Corp or give up 40.0% of portfolio value over 90 days.

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

Orestone Mining Corp  vs.  XXIX Metal Corp

Orestone Mining Corp

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Orestone Mining Corp are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, Orestone Mining showed solid returns over the last few months and may actually be approaching a breakup point.

XXIX Metal Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days XXIX Metal Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable forward indicators, XXIX Metal is not utilizing all of its potentials. The recent stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Orestone Mining and XXIX Metal

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

The idea behind Orestone Mining Corp and XXIX Metal 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.

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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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.