Correlation Between O3 Mining and Integra Resources

Can any of the company-specific risk be diversified away by investing in both O3 Mining and Integra Resources 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 O3 Mining and Integra Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between O3 Mining and Integra Resources Corp, you can compare the effects of market volatilities on O3 Mining and Integra Resources 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 O3 Mining with a short position of Integra Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of O3 Mining and Integra Resources.

Diversification Opportunities for O3 Mining and Integra Resources

-0.1

Correlation Coefficient

O3 Mining  Integra Resources

Good diversification

The 3 months correlation between OIII and Integra is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding O3 Mining and Integra Resources Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Integra Resources Corp and O3 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 O3 Mining are associated (or correlated) with Integra Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Integra Resources Corp has no effect on the direction of O3 Mining i.e., O3 Mining and Integra Resources go up and down completely randomly.

Pair Corralation between O3 Mining and Integra Resources

Assuming the 90 days trading horizon O3 Mining is expected to generate 1.76 times more return on investment than Integra Resources. However, O3 Mining is 1.76 times more volatile than Integra Resources Corp. It trades about 0.06 of its potential returns per unit of risk. Integra Resources Corp is currently generating about 0.01 per unit of risk. If you would invest  130.00  in O3 Mining on September 22, 2024 and sell it today you would earn a total of  36.00  from holding O3 Mining or generate 27.69% return on investment over 90 days.

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

O3 Mining  vs.  Integra Resources Corp

O3 Mining

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in O3 Mining are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal forward indicators, O3 Mining showed solid returns over the last few months and may actually be approaching a breakup point.

Integra Resources Corp

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with O3 Mining and Integra Resources

The main advantage of trading using opposite O3 Mining and Integra Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if O3 Mining position performs unexpectedly, Integra Resources 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 Integra Resources will offset losses from the drop in Integra Resources' long position.

The idea behind O3 Mining and Integra Resources 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.