Correlation Between Orogen Royalties and Canlan Ice

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

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

Diversification Opportunities for Orogen Royalties and Canlan Ice

-0.63

Correlation Coefficient

Orogen Royalties  Canlan Ice

Excellent diversification

The 3 months correlation between Orogen and Canlan is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding Orogen Royalties and Canlan Ice Sports in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Canlan Ice Sports and Orogen Royalties 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 Orogen Royalties are associated (or correlated) with Canlan Ice. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Canlan Ice Sports has no effect on the direction of Orogen Royalties i.e., Orogen Royalties and Canlan Ice go up and down completely randomly.

Pair Corralation between Orogen Royalties and Canlan Ice

Assuming the 90 days horizon Orogen Royalties is expected to under-perform the Canlan Ice. In addition to that, Orogen Royalties is 2.13 times more volatile than Canlan Ice Sports. It trades about -0.05 of its total potential returns per unit of risk. Canlan Ice Sports is currently generating about 0.09 per unit of volatility. If you would invest  377.00  in Canlan Ice Sports on September 14, 2024 and sell it today you would earn a total of  32.00  from holding Canlan Ice Sports or generate 8.49% return on investment over 90 days.

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

Orogen Royalties  vs.  Canlan Ice Sports

Orogen Royalties

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Orogen Royalties has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unfluctuating performance, the Stock's basic indicators remain stable and the latest fuss on Wall Street may also be a sign of long-term gains for the venture sophisticated investors.

Canlan Ice Sports

Risk-Adjusted Performance

7 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Canlan Ice Sports are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating technical and fundamental indicators, Canlan Ice may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Orogen Royalties and Canlan Ice

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

The idea behind Orogen Royalties and Canlan Ice Sports 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.