Correlation Between Orex Minerals and Cordoba Minerals

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

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

Diversification Opportunities for Orex Minerals and Cordoba Minerals

-0.02

Correlation Coefficient

Orex Minerals  Cordoba Minerals

Good diversification

The 3 months correlation between Orex and Cordoba is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Orex Minerals and Cordoba Minerals Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cordoba Minerals Corp and Orex Minerals 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 Orex Minerals are associated (or correlated) with Cordoba Minerals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cordoba Minerals Corp has no effect on the direction of Orex Minerals i.e., Orex Minerals and Cordoba Minerals go up and down completely randomly.

Pair Corralation between Orex Minerals and Cordoba Minerals

Assuming the 90 days horizon Orex Minerals is expected to generate 1.2 times less return on investment than Cordoba Minerals. But when comparing it to its historical volatility, Orex Minerals is 1.13 times less risky than Cordoba Minerals. It trades about 0.08 of its potential returns per unit of risk. Cordoba Minerals Corp is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest  39.00  in Cordoba Minerals Corp on December 28, 2024 and sell it today you would earn a total of  11.00  from holding Cordoba Minerals Corp or generate 28.21% return on investment over 90 days.

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

Orex Minerals  vs.  Cordoba Minerals Corp

Orex Minerals

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Orex Minerals are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Orex Minerals showed solid returns over the last few months and may actually be approaching a breakup point.

Cordoba Minerals Corp

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Cordoba Minerals Corp are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Cordoba Minerals showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Orex Minerals and Cordoba Minerals

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

The idea behind Orex Minerals and Cordoba Minerals 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.