Correlation Between Elemental Royalties and Vox Royalty

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

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

Diversification Opportunities for Elemental Royalties and Vox Royalty

-0.25

Correlation Coefficient

Elemental Royalties  Vox Royalty

Very good diversification

The 3 months correlation between Elemental and Vox is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding Elemental Royalties Corp and Vox Royalty Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vox Royalty Corp and Elemental 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 Elemental Royalties Corp are associated (or correlated) with Vox Royalty. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vox Royalty Corp has no effect on the direction of Elemental Royalties i.e., Elemental Royalties and Vox Royalty go up and down completely randomly.

Pair Corralation between Elemental Royalties and Vox Royalty

Assuming the 90 days horizon Elemental Royalties Corp is expected to generate 1.1 times more return on investment than Vox Royalty. However, Elemental Royalties is 1.1 times more volatile than Vox Royalty Corp. It trades about 0.2 of its potential returns per unit of risk. Vox Royalty Corp is currently generating about 0.0 per unit of risk. If you would invest  144.00  in Elemental Royalties Corp on April 23, 2025 and sell it today you would earn a total of  67.00  from holding Elemental Royalties Corp or generate 46.53% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.41%
Values	Daily Returns

Elemental Royalties Corp  vs.  Vox Royalty Corp

Elemental Royalties Corp

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Elemental Royalties Corp are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Elemental Royalties showed solid returns over the last few months and may actually be approaching a breakup point.

Vox Royalty Corp

Risk-Adjusted Performance

Very Weak

Over the last 90 days Vox Royalty Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Vox Royalty is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Elemental Royalties and Vox Royalty

The main advantage of trading using opposite Elemental Royalties and Vox Royalty positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Elemental Royalties position performs unexpectedly, Vox Royalty 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 Vox Royalty will offset losses from the drop in Vox Royalty's long position.

The idea behind Elemental Royalties Corp and Vox Royalty Corp 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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.