Correlation Between Infinico Metals and OceanaGold

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

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

Diversification Opportunities for Infinico Metals and OceanaGold

-0.74

Correlation Coefficient

Infinico Metals  OceanaGold

Pay attention - limited upside

The 3 months correlation between Infinico and OceanaGold is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding Infinico Metals Corp and OceanaGold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on OceanaGold and Infinico Metals 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 Infinico Metals Corp are associated (or correlated) with OceanaGold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of OceanaGold has no effect on the direction of Infinico Metals i.e., Infinico Metals and OceanaGold go up and down completely randomly.

Pair Corralation between Infinico Metals and OceanaGold

Assuming the 90 days trading horizon Infinico Metals Corp is expected to under-perform the OceanaGold. In addition to that, Infinico Metals is 3.21 times more volatile than OceanaGold. It trades about -0.01 of its total potential returns per unit of risk. OceanaGold is currently generating about 0.13 per unit of volatility. If you would invest  376.00  in OceanaGold on September 12, 2024 and sell it today you would earn a total of  70.00  from holding OceanaGold or generate 18.62% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	90.48%
Values	Daily Returns

Infinico Metals Corp  vs.  OceanaGold

Infinico Metals Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Infinico Metals Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable technical and fundamental indicators, Infinico Metals is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

OceanaGold

Risk-Adjusted Performance

10 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in OceanaGold are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of very abnormal fundamental indicators, OceanaGold displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Infinico Metals and OceanaGold

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

The idea behind Infinico Metals Corp and OceanaGold 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.