Correlation Between IShares Canadian and Orezone Gold

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

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

Diversification Opportunities for IShares Canadian and Orezone Gold

-0.58

Correlation Coefficient

IShares Canadian  Orezone Gold

Excellent diversification

The 3 months correlation between IShares and Orezone is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding iShares Canadian HYBrid and Orezone Gold Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Orezone Gold Corp and IShares Canadian 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 iShares Canadian HYBrid are associated (or correlated) with Orezone Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Orezone Gold Corp has no effect on the direction of IShares Canadian i.e., IShares Canadian and Orezone Gold go up and down completely randomly.

Pair Corralation between IShares Canadian and Orezone Gold

Assuming the 90 days trading horizon iShares Canadian HYBrid is expected to under-perform the Orezone Gold. But the etf apears to be less risky and, when comparing its historical volatility, iShares Canadian HYBrid is 10.97 times less risky than Orezone Gold. The etf trades about -0.09 of its potential returns per unit of risk. The Orezone Gold Corp is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest  66.00  in Orezone Gold Corp on October 8, 2024 and sell it today you would earn a total of  0.00  from holding Orezone Gold Corp or generate 0.0% return on investment over 90 days.

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

iShares Canadian HYBrid  vs.  Orezone Gold Corp

iShares Canadian HYBrid

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in iShares Canadian HYBrid are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy fundamental drivers, IShares Canadian is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

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. In spite of latest unfluctuating performance, the Stock's technical and fundamental indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

Pair Trading with IShares Canadian and Orezone Gold

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

The idea behind iShares Canadian HYBrid and Orezone 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.