Correlation Between Tudor Gold and Orogen Royalties

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

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

Diversification Opportunities for Tudor Gold and Orogen Royalties

0.12

Correlation Coefficient

Tudor Gold  Orogen Royalties

Average diversification

The 3 months correlation between Tudor and Orogen is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Tudor Gold Corp and Orogen Royalties in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Orogen Royalties and Tudor 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 Tudor Gold 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 Tudor Gold i.e., Tudor Gold and Orogen Royalties go up and down completely randomly.

Pair Corralation between Tudor Gold and Orogen Royalties

Assuming the 90 days horizon Tudor Gold is expected to generate 8.92 times less return on investment than Orogen Royalties. In addition to that, Tudor Gold is 1.99 times more volatile than Orogen Royalties. It trades about 0.01 of its total potential returns per unit of risk. Orogen Royalties is currently generating about 0.16 per unit of volatility. If you would invest  91.00  in Orogen Royalties on December 29, 2024 and sell it today you would earn a total of  17.00  from holding Orogen Royalties or generate 18.68% return on investment over 90 days.

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

Tudor Gold Corp  vs.  Orogen Royalties

Tudor Gold Corp

Risk-Adjusted Performance

Weak

Over the last 90 days Tudor Gold Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Tudor Gold is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Orogen Royalties

Risk-Adjusted Performance

Good

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

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

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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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.