Correlation Between Northern Star and OceanaGold

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

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

Diversification Opportunities for Northern Star and OceanaGold

0.1

Correlation Coefficient

Northern Star  OceanaGold

Average diversification

The 3 months correlation between Northern and OceanaGold is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Northern Star Resources and OceanaGold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on OceanaGold and Northern Star 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 Northern Star Resources 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 Northern Star i.e., Northern Star and OceanaGold go up and down completely randomly.

Pair Corralation between Northern Star and OceanaGold

Assuming the 90 days horizon Northern Star Resources is expected to under-perform the OceanaGold. In addition to that, Northern Star is 1.18 times more volatile than OceanaGold. It trades about -0.07 of its total potential returns per unit of risk. OceanaGold is currently generating about 0.15 per unit of volatility. If you would invest  1,119  in OceanaGold on May 6, 2025 and sell it today you would earn a total of  319.00  from holding OceanaGold or generate 28.51% return on investment over 90 days.

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

Northern Star Resources  vs.  OceanaGold

Northern Star Resources

Risk-Adjusted Performance

Very Weak

Over the last 90 days Northern Star Resources 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 basic indicators remain nearly stable which may send shares a bit higher in September 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

OceanaGold

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in OceanaGold are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, OceanaGold reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Northern Star and OceanaGold

The main advantage of trading using opposite Northern Star and OceanaGold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Northern Star 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 Northern Star Resources 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.