Correlation Between Orezone Gold and Reunion Gold

Can any of the company-specific risk be diversified away by investing in both Orezone Gold and Reunion Gold 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 Reunion Gold 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 Reunion Gold, you can compare the effects of market volatilities on Orezone Gold and Reunion Gold 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 Reunion Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Orezone Gold and Reunion Gold.

Diversification Opportunities for Orezone Gold and Reunion Gold

-0.43

Correlation Coefficient

Orezone Gold  Reunion Gold

Very good diversification

The 3 months correlation between Orezone and Reunion is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Orezone Gold Corp and Reunion Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Reunion Gold 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 Reunion Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Reunion Gold has no effect on the direction of Orezone Gold i.e., Orezone Gold and Reunion Gold go up and down completely randomly.

Pair Corralation between Orezone Gold and Reunion Gold

If you would invest  54.00  in Reunion Gold on September 13, 2024 and sell it today you would earn a total of  0.00  from holding Reunion Gold or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	1.59%
Values	Daily Returns

Orezone Gold Corp  vs.  Reunion Gold

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. Despite fragile performance in the last few months, the Stock's fundamental indicators remain nearly stable which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Reunion Gold

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Reunion Gold has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable technical and fundamental indicators, Reunion Gold is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Orezone Gold and Reunion Gold

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

The idea behind Orezone Gold Corp and Reunion Gold 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.