Correlation Between Orea Mining and SPDR Russell

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

By analyzing existing cross correlation between Orea Mining Corp and SPDR Russell 1000, you can compare the effects of market volatilities on Orea Mining and SPDR Russell 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 Orea Mining with a short position of SPDR Russell. Check out your portfolio center. Please also check ongoing floating volatility patterns of Orea Mining and SPDR Russell.

Diversification Opportunities for Orea Mining and SPDR Russell

0.0

Correlation Coefficient

Orea Mining  SPDR Russell

Pay attention - limited upside

The 3 months correlation between Orea and SPDR is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Orea Mining Corp and SPDR Russell 1000 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPDR Russell 1000 and Orea 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 Orea Mining Corp are associated (or correlated) with SPDR Russell. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SPDR Russell 1000 has no effect on the direction of Orea Mining i.e., Orea Mining and SPDR Russell go up and down completely randomly.

Pair Corralation between Orea Mining and SPDR Russell

Assuming the 90 days horizon Orea Mining Corp is expected to under-perform the SPDR Russell. In addition to that, Orea Mining is 27.51 times more volatile than SPDR Russell 1000. It trades about -0.25 of its total potential returns per unit of risk. SPDR Russell 1000 is currently generating about -0.19 per unit of volatility. If you would invest  11,358  in SPDR Russell 1000 on January 25, 2024 and sell it today you would lose (372.00) from holding SPDR Russell 1000 or give up 3.28% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	95.24%
Values	Daily Returns

Orea Mining Corp  vs.  SPDR Russell 1000

Orea Mining Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Orea Mining Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in May 2024. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

SPDR Russell 1000

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in SPDR Russell 1000 are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy technical and fundamental indicators, SPDR Russell is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Orea Mining and SPDR Russell

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

The idea behind Orea Mining Corp and SPDR Russell 1000 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.