Correlation Between Orezone Gold and CanAlaska Uranium

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

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

Diversification Opportunities for Orezone Gold and CanAlaska Uranium

-0.37

Correlation Coefficient

Orezone Gold  CanAlaska Uranium

Very good diversification

The 3 months correlation between Orezone and CanAlaska is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Orezone Gold Corp and CanAlaska Uranium in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CanAlaska Uranium and Orezone Gold 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 Orezone Gold Corp are associated (or correlated) with CanAlaska Uranium. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CanAlaska Uranium has no effect on the direction of Orezone Gold i.e., Orezone Gold and CanAlaska Uranium go up and down completely randomly.

Pair Corralation between Orezone Gold and CanAlaska Uranium

Assuming the 90 days trading horizon Orezone Gold Corp is expected to under-perform the CanAlaska Uranium. In addition to that, Orezone Gold is 1.05 times more volatile than CanAlaska Uranium. It trades about -0.04 of its total potential returns per unit of risk. CanAlaska Uranium is currently generating about 0.07 per unit of volatility. If you would invest  69.00  in CanAlaska Uranium on September 14, 2024 and sell it today you would earn a total of  8.00  from holding CanAlaska Uranium or generate 11.59% return on investment over 90 days.

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

Orezone Gold Corp  vs.  CanAlaska Uranium

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.

CanAlaska Uranium

Risk-Adjusted Performance

5 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in CanAlaska Uranium are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unfluctuating basic indicators, CanAlaska Uranium showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Orezone Gold and CanAlaska Uranium

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

The idea behind Orezone Gold Corp and CanAlaska Uranium 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.