Correlation Between High Liner and Orogen Royalties

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

By analyzing existing cross correlation between High Liner Foods and Orogen Royalties, you can compare the effects of market volatilities on High Liner and Orogen Royalties 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 High Liner with a short position of Orogen Royalties. Check out your portfolio center. Please also check ongoing floating volatility patterns of High Liner and Orogen Royalties.

Diversification Opportunities for High Liner and Orogen Royalties

-0.47

Correlation Coefficient

High Liner  Orogen Royalties

Very good diversification

The 3 months correlation between High and Orogen is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding High Liner Foods and Orogen Royalties in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Orogen Royalties and High Liner 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 High Liner Foods are associated (or correlated) with Orogen Royalties. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Orogen Royalties has no effect on the direction of High Liner i.e., High Liner and Orogen Royalties go up and down completely randomly.

Pair Corralation between High Liner and Orogen Royalties

Assuming the 90 days trading horizon High Liner is expected to generate 5.73 times less return on investment than Orogen Royalties. But when comparing it to its historical volatility, High Liner Foods is 1.73 times less risky than Orogen Royalties. It trades about 0.03 of its potential returns per unit of risk. Orogen Royalties is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest  49.00  in Orogen Royalties on September 4, 2024 and sell it today you would earn a total of  95.00  from holding Orogen Royalties or generate 193.88% return on investment over 90 days.

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

High Liner Foods  vs.  Orogen Royalties

High Liner Foods

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in High Liner Foods are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating technical and fundamental indicators, High Liner displayed solid returns over the last few months and may actually be approaching a breakup point.

Orogen Royalties

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Orogen Royalties are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of fairly stable basic indicators, Orogen Royalties is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with High Liner and Orogen Royalties

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

The idea behind High Liner Foods and Orogen Royalties 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.