Correlation Between Orogen Royalties and Hummingbird Resources
Can any of the company-specific risk be diversified away by investing in both Orogen Royalties and Hummingbird Resources 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 Hummingbird Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Orogen Royalties and Hummingbird Resources PLC, you can compare the effects of market volatilities on Orogen Royalties and Hummingbird Resources 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 Hummingbird Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Orogen Royalties and Hummingbird Resources.
Diversification Opportunities for Orogen Royalties and Hummingbird Resources
0.23 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Orogen and Hummingbird is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Orogen Royalties and Hummingbird Resources PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hummingbird Resources PLC 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 Hummingbird Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hummingbird Resources PLC has no effect on the direction of Orogen Royalties i.e., Orogen Royalties and Hummingbird Resources go up and down completely randomly.
Pair Corralation between Orogen Royalties and Hummingbird Resources
Assuming the 90 days horizon Orogen Royalties is expected to generate 3.35 times less return on investment than Hummingbird Resources. But when comparing it to its historical volatility, Orogen Royalties is 6.29 times less risky than Hummingbird Resources. It trades about 0.22 of its potential returns per unit of risk. Hummingbird Resources PLC is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 2.70 in Hummingbird Resources PLC on November 3, 2024 and sell it today you would earn a total of 0.50 from holding Hummingbird Resources PLC or generate 18.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Orogen Royalties vs. Hummingbird Resources PLC
Performance |
| Timeline |
| Orogen Royalties |
| Hummingbird Resources PLC |
Orogen Royalties and Hummingbird Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Orogen Royalties and Hummingbird Resources
The main advantage of trading using opposite Orogen Royalties and Hummingbird Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Orogen Royalties position performs unexpectedly, Hummingbird Resources 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 Hummingbird Resources will offset losses from the drop in Hummingbird Resources' long position.| Orogen Royalties vs. Precipitate Gold Corp | Orogen Royalties vs. Sailfish Royalty Corp | Orogen Royalties vs. Hummingbird Resources PLC | Orogen Royalties vs. Almadex Minerals |
| Hummingbird Resources vs. Fremont Gold | Hummingbird Resources vs. Norsemont Mining | Hummingbird Resources vs. Tudor Gold Corp | Hummingbird Resources vs. Japan Gold Corp |
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.
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