Correlation Between OceanaGold and Belo Sun

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

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

Diversification Opportunities for OceanaGold and Belo Sun

0.0

Correlation Coefficient

OceanaGold  Belo Sun

Pay attention - limited upside

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

Pair Corralation between OceanaGold and Belo Sun

If you would invest  304.00  in OceanaGold on January 29, 2024 and sell it today you would earn a total of  16.00  from holding OceanaGold or generate 5.26% return on investment over 90 days.

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

OceanaGold  vs.  Belo Sun Mining

OceanaGold

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in OceanaGold are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating fundamental indicators, OceanaGold displayed solid returns over the last few months and may actually be approaching a breakup point.

Belo Sun Mining

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Belo Sun Mining are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Belo Sun displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with OceanaGold and Belo Sun

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

The idea behind OceanaGold and Belo Sun Mining 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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.