Correlation Between Aldebaran Resources and Metals X
Can any of the company-specific risk be diversified away by investing in both Aldebaran Resources and Metals X 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 Aldebaran Resources and Metals X into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aldebaran Resources and Metals X Limited, you can compare the effects of market volatilities on Aldebaran Resources and Metals X 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 Aldebaran Resources with a short position of Metals X. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aldebaran Resources and Metals X.
Diversification Opportunities for Aldebaran Resources and Metals X
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Aldebaran and Metals is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Aldebaran Resources and Metals X Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Metals X Limited and Aldebaran Resources 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 Aldebaran Resources are associated (or correlated) with Metals X. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Metals X Limited has no effect on the direction of Aldebaran Resources i.e., Aldebaran Resources and Metals X go up and down completely randomly.
Pair Corralation between Aldebaran Resources and Metals X
Assuming the 90 days horizon Aldebaran Resources is expected to generate 1.24 times more return on investment than Metals X. However, Aldebaran Resources is 1.24 times more volatile than Metals X Limited. It trades about 0.26 of its potential returns per unit of risk. Metals X Limited is currently generating about -0.07 per unit of risk. If you would invest 104.00 in Aldebaran Resources on August 25, 2024 and sell it today you would earn a total of 41.00 from holding Aldebaran Resources or generate 39.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aldebaran Resources vs. Metals X Limited
Performance |
| Timeline |
| Aldebaran Resources |
| Metals X Limited |
Aldebaran Resources and Metals X Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aldebaran Resources and Metals X
The main advantage of trading using opposite Aldebaran Resources and Metals X positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aldebaran Resources position performs unexpectedly, Metals X 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 Metals X will offset losses from the drop in Metals X's long position.| Aldebaran Resources vs. Huntsman Exploration | Aldebaran Resources vs. Aurelia Metals Limited | Aldebaran Resources vs. Adriatic Metals PLC | Aldebaran Resources vs. American Helium |
| Metals X vs. Norra Metals Corp | Metals X vs. ZincX Resources Corp | Metals X vs. Nuinsco Resources Limited | Metals X vs. South Star Battery |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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