Correlation Between Asia Broadband and Aurelia Metals
Can any of the company-specific risk be diversified away by investing in both Asia Broadband and Aurelia Metals 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 Asia Broadband and Aurelia Metals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Asia Broadband and Aurelia Metals Limited, you can compare the effects of market volatilities on Asia Broadband and Aurelia Metals 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 Asia Broadband with a short position of Aurelia Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Asia Broadband and Aurelia Metals.
Diversification Opportunities for Asia Broadband and Aurelia Metals
0.25 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Asia and Aurelia is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Asia Broadband and Aurelia Metals Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aurelia Metals and Asia Broadband 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 Asia Broadband are associated (or correlated) with Aurelia Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aurelia Metals has no effect on the direction of Asia Broadband i.e., Asia Broadband and Aurelia Metals go up and down completely randomly.
Pair Corralation between Asia Broadband and Aurelia Metals
Given the investment horizon of 90 days Asia Broadband is expected to generate 0.77 times more return on investment than Aurelia Metals. However, Asia Broadband is 1.3 times less risky than Aurelia Metals. It trades about -0.14 of its potential returns per unit of risk. Aurelia Metals Limited is currently generating about -0.1 per unit of risk. If you would invest 4.50 in Asia Broadband on September 12, 2024 and sell it today you would lose (2.02) from holding Asia Broadband or give up 44.89% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Asia Broadband vs. Aurelia Metals Limited
Performance |
| Timeline |
| Asia Broadband |
| Aurelia Metals |
Asia Broadband and Aurelia Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Asia Broadband and Aurelia Metals
The main advantage of trading using opposite Asia Broadband and Aurelia Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Asia Broadband position performs unexpectedly, Aurelia Metals 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 Aurelia Metals will offset losses from the drop in Aurelia Metals' long position.| Asia Broadband vs. Fury Gold Mines | Asia Broadband vs. Lion Copper and | Asia Broadband vs. Trilogy Metals | Asia Broadband vs. Western Copper and |
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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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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