Correlation Between Apple and Orezone Gold

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

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

Diversification Opportunities for Apple and Orezone Gold

-0.55

Correlation Coefficient

Apple  Orezone Gold

Excellent diversification

The 3 months correlation between Apple and Orezone is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Apple Inc CDR and Orezone Gold Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Orezone Gold Corp and Apple 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 Apple Inc CDR are associated (or correlated) with Orezone Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Orezone Gold Corp has no effect on the direction of Apple i.e., Apple and Orezone Gold go up and down completely randomly.

Pair Corralation between Apple and Orezone Gold

Assuming the 90 days trading horizon Apple is expected to generate 1.52 times less return on investment than Orezone Gold. But when comparing it to its historical volatility, Apple Inc CDR is 2.37 times less risky than Orezone Gold. It trades about 0.03 of its potential returns per unit of risk. Orezone Gold Corp is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  117.00  in Orezone Gold Corp on April 25, 2025 and sell it today you would earn a total of  0.00  from holding Orezone Gold Corp or generate 0.0% return on investment over 90 days.

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

Apple Inc CDR  vs.  Orezone Gold Corp

Apple Inc CDR

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Apple Inc CDR are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound technical and fundamental indicators, Apple is not utilizing all of its potentials. The recent stock price tumult, may contribute to shorter-term losses for the shareholders.

Orezone Gold Corp

Risk-Adjusted Performance

Very Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Orezone Gold Corp are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy technical and fundamental indicators, Orezone Gold is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Apple and Orezone Gold

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

The idea behind Apple Inc CDR and Orezone Gold Corp 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.