Correlation Between Orestone Mining and Taseko Mines
Can any of the company-specific risk be diversified away by investing in both Orestone Mining and Taseko Mines 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 Taseko Mines 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 Taseko Mines, you can compare the effects of market volatilities on Orestone Mining and Taseko Mines 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 Taseko Mines. Check out your portfolio center. Please also check ongoing floating volatility patterns of Orestone Mining and Taseko Mines.
Diversification Opportunities for Orestone Mining and Taseko Mines
0.19 | Correlation Coefficient |
Average diversification
The 3 months correlation between Orestone and Taseko is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Orestone Mining Corp and Taseko Mines in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Taseko Mines 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 Taseko Mines. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Taseko Mines has no effect on the direction of Orestone Mining i.e., Orestone Mining and Taseko Mines go up and down completely randomly.
Pair Corralation between Orestone Mining and Taseko Mines
Assuming the 90 days horizon Orestone Mining Corp is expected to generate 4.35 times more return on investment than Taseko Mines. However, Orestone Mining is 4.35 times more volatile than Taseko Mines. It trades about 0.06 of its potential returns per unit of risk. Taseko Mines is currently generating about 0.19 per unit of risk. If you would invest 3.00 in Orestone Mining Corp on January 25, 2024 and sell it today you would earn a total of 0.00 from holding Orestone Mining Corp or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Orestone Mining Corp vs. Taseko Mines
Performance |
| Timeline |
| Orestone Mining Corp |
| Taseko Mines |
Orestone Mining and Taseko Mines Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Orestone Mining and Taseko Mines
The main advantage of trading using opposite Orestone Mining and Taseko Mines positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Orestone Mining position performs unexpectedly, Taseko Mines 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 Taseko Mines will offset losses from the drop in Taseko Mines' long position.The idea behind Orestone Mining Corp and Taseko Mines 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.Check out your portfolio center.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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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