Correlation Between Zijin Mining and Orogen Royalties

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

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

Diversification Opportunities for Zijin Mining and Orogen Royalties

0.86

Correlation Coefficient

Zijin Mining  Orogen Royalties

Very poor diversification

The 3 months correlation between Zijin and Orogen is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Zijin Mining Group and Orogen Royalties in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Orogen Royalties and Zijin Mining 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 Zijin Mining Group 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 Zijin Mining i.e., Zijin Mining and Orogen Royalties go up and down completely randomly.

Pair Corralation between Zijin Mining and Orogen Royalties

Assuming the 90 days horizon Zijin Mining is expected to generate 2.29 times less return on investment than Orogen Royalties. In addition to that, Zijin Mining is 1.22 times more volatile than Orogen Royalties. It trades about 0.03 of its total potential returns per unit of risk. Orogen Royalties is currently generating about 0.08 per unit of volatility. If you would invest  38.00  in Orogen Royalties on October 10, 2024 and sell it today you would earn a total of  57.00  from holding Orogen Royalties or generate 150.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	86.06%
Values	Daily Returns

Zijin Mining Group  vs.  Orogen Royalties

Zijin Mining Group

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Zijin Mining Group has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's primary indicators remain fairly strong which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

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. Despite latest weak performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with Zijin Mining and Orogen Royalties

The main advantage of trading using opposite Zijin Mining and Orogen Royalties positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zijin Mining 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 Zijin Mining Group 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .