Correlation Between Orogen Royalties and Harmony Gold
Can any of the company-specific risk be diversified away by investing in both Orogen Royalties and Harmony Gold 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 Harmony Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Orogen Royalties and Harmony Gold Mining, you can compare the effects of market volatilities on Orogen Royalties and Harmony Gold 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 Harmony Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Orogen Royalties and Harmony Gold.
Diversification Opportunities for Orogen Royalties and Harmony Gold
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Orogen and Harmony is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Orogen Royalties and Harmony Gold Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Harmony Gold Mining 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 Harmony Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Harmony Gold Mining has no effect on the direction of Orogen Royalties i.e., Orogen Royalties and Harmony Gold go up and down completely randomly.
Pair Corralation between Orogen Royalties and Harmony Gold
Assuming the 90 days horizon Orogen Royalties is expected to generate 0.89 times more return on investment than Harmony Gold. However, Orogen Royalties is 1.13 times less risky than Harmony Gold. It trades about 0.1 of its potential returns per unit of risk. Harmony Gold Mining is currently generating about 0.08 per unit of risk. If you would invest 30.00 in Orogen Royalties on August 27, 2024 and sell it today you would earn a total of 71.00 from holding Orogen Royalties or generate 236.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Orogen Royalties vs. Harmony Gold Mining
Performance |
| Timeline |
| Orogen Royalties |
| Harmony Gold Mining |
Orogen Royalties and Harmony Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Orogen Royalties and Harmony Gold
The main advantage of trading using opposite Orogen Royalties and Harmony Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Orogen Royalties position performs unexpectedly, Harmony Gold 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 Harmony Gold will offset losses from the drop in Harmony Gold's long position.| Orogen Royalties vs. Aurion Resources | Orogen Royalties vs. Liberty Gold Corp | Orogen Royalties vs. Orezone Gold Corp | Orogen Royalties vs. Radisson Mining Resources |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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