Correlation Between Torex Gold and OceanaGold

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

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

Diversification Opportunities for Torex Gold and OceanaGold

0.36

Correlation Coefficient

Torex Gold  OceanaGold

Weak diversification

The 3 months correlation between Torex and OceanaGold is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Torex Gold Resources and OceanaGold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on OceanaGold and Torex 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 Torex Gold 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 Torex Gold i.e., Torex Gold and OceanaGold go up and down completely randomly.

Pair Corralation between Torex Gold and OceanaGold

Assuming the 90 days horizon Torex Gold Resources is expected to under-perform the OceanaGold. But the pink sheet apears to be less risky and, when comparing its historical volatility, Torex Gold Resources is 1.15 times less risky than OceanaGold. The pink sheet trades about -0.08 of its potential returns per unit of risk. The OceanaGold is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest  1,095  in OceanaGold on May 7, 2025 and sell it today you would earn a total of  343.00  from holding OceanaGold or generate 31.32% return on investment over 90 days.

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

Torex Gold Resources  vs.  OceanaGold

Torex Gold Resources

Risk-Adjusted Performance

Very Weak

Over the last 90 days Torex Gold Resources has generated negative risk-adjusted returns adding no value to investors with long positions. Despite abnormal 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

Good

Compared to the overall equity markets, risk-adjusted returns on investments in OceanaGold are ranked lower than 12 (%) 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 Torex Gold and OceanaGold

The main advantage of trading using opposite Torex Gold and OceanaGold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Torex Gold 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 Torex Gold 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.