Correlation Between TeraGo and Ophir Gold

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

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

Diversification Opportunities for TeraGo and Ophir Gold

0.42

Correlation Coefficient

TeraGo  Ophir Gold

Very weak diversification

The 3 months correlation between TeraGo and Ophir is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding TeraGo Inc and Ophir Gold Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ophir Gold Corp and TeraGo 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 TeraGo Inc are associated (or correlated) with Ophir Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ophir Gold Corp has no effect on the direction of TeraGo i.e., TeraGo and Ophir Gold go up and down completely randomly.

Pair Corralation between TeraGo and Ophir Gold

Assuming the 90 days trading horizon TeraGo Inc is expected to under-perform the Ophir Gold. But the stock apears to be less risky and, when comparing its historical volatility, TeraGo Inc is 2.31 times less risky than Ophir Gold. The stock trades about -0.23 of its potential returns per unit of risk. The Ophir Gold Corp is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest  11.00  in Ophir Gold Corp on October 27, 2024 and sell it today you would lose (3.00) from holding Ophir Gold Corp or give up 27.27% of portfolio value over 90 days.

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

TeraGo Inc  vs.  Ophir Gold Corp

TeraGo Inc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days TeraGo Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in February 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Ophir Gold Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Ophir Gold Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest abnormal performance, the Stock's technical indicators remain stable and the latest fuss on Wall Street may also be a sign of long-term gains for the venture sophisticated investors.

Pair Trading with TeraGo and Ophir Gold

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

The idea behind TeraGo Inc and Ophir 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.

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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 Commodity Directory module to find actively traded commodities issued by global exchanges.