Correlation Between Sailfish Royalty and Orogen Royalties

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

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

Diversification Opportunities for Sailfish Royalty and Orogen Royalties

0.42

Correlation Coefficient

Sailfish Royalty  Orogen Royalties

Very weak diversification

The 3 months correlation between Sailfish and Orogen is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Sailfish Royalty Corp and Orogen Royalties in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Orogen Royalties and Sailfish Royalty 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 Sailfish Royalty Corp 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 Sailfish Royalty i.e., Sailfish Royalty and Orogen Royalties go up and down completely randomly.

Pair Corralation between Sailfish Royalty and Orogen Royalties

Assuming the 90 days horizon Sailfish Royalty Corp is expected to generate 1.94 times more return on investment than Orogen Royalties. However, Sailfish Royalty is 1.94 times more volatile than Orogen Royalties. It trades about 0.12 of its potential returns per unit of risk. Orogen Royalties is currently generating about 0.15 per unit of risk. If you would invest  93.00  in Sailfish Royalty Corp on December 30, 2024 and sell it today you would earn a total of  24.00  from holding Sailfish Royalty Corp or generate 25.81% return on investment over 90 days.

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

Sailfish Royalty Corp  vs.  Orogen Royalties

Sailfish Royalty Corp

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Sailfish Royalty Corp are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Sailfish Royalty reported solid returns over the last few months and may actually be approaching a breakup point.

Orogen Royalties

Risk-Adjusted Performance

Good

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

Pair Trading with Sailfish Royalty and Orogen Royalties

The main advantage of trading using opposite Sailfish Royalty and Orogen Royalties positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sailfish Royalty 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 Sailfish Royalty Corp 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.

Check out your portfolio center.

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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.