Correlation Between Orezone Gold and Omineca Mining

Can any of the company-specific risk be diversified away by investing in both Orezone Gold and Omineca Mining 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 Omineca Mining 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 Omineca Mining and, you can compare the effects of market volatilities on Orezone Gold and Omineca Mining 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 Omineca Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Orezone Gold and Omineca Mining.

Diversification Opportunities for Orezone Gold and Omineca Mining

0.34

Correlation Coefficient

Orezone Gold  Omineca Mining

Weak diversification

The 3 months correlation between Orezone and Omineca is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Orezone Gold Corp and Omineca Mining and in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Omineca Mining 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 Omineca Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Omineca Mining has no effect on the direction of Orezone Gold i.e., Orezone Gold and Omineca Mining go up and down completely randomly.

Pair Corralation between Orezone Gold and Omineca Mining

Assuming the 90 days horizon Orezone Gold Corp is expected to under-perform the Omineca Mining. But the otc stock apears to be less risky and, when comparing its historical volatility, Orezone Gold Corp is 2.66 times less risky than Omineca Mining. The otc stock trades about -0.05 of its potential returns per unit of risk. The Omineca Mining and is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest  5.00  in Omineca Mining and on August 30, 2024 and sell it today you would lose (1.44) from holding Omineca Mining and or give up 28.8% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.44%
Values	Daily Returns

Orezone Gold Corp  vs.  Omineca Mining and

Orezone Gold Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Orezone Gold Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's fundamental indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Omineca Mining

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Omineca Mining and has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with Orezone Gold and Omineca Mining

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

The idea behind Orezone Gold Corp and Omineca Mining and 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.