Correlation Between Aeris Environmental and Anax Metals
Can any of the company-specific risk be diversified away by investing in both Aeris Environmental and Anax 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 Aeris Environmental and Anax Metals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aeris Environmental and Anax Metals, you can compare the effects of market volatilities on Aeris Environmental and Anax 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 Aeris Environmental with a short position of Anax Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aeris Environmental and Anax Metals.
Diversification Opportunities for Aeris Environmental and Anax Metals
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Aeris and Anax is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Aeris Environmental and Anax Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Anax Metals and Aeris Environmental 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 Aeris Environmental are associated (or correlated) with Anax Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Anax Metals has no effect on the direction of Aeris Environmental i.e., Aeris Environmental and Anax Metals go up and down completely randomly.
Pair Corralation between Aeris Environmental and Anax Metals
Assuming the 90 days trading horizon Aeris Environmental is expected to generate 0.72 times more return on investment than Anax Metals. However, Aeris Environmental is 1.39 times less risky than Anax Metals. It trades about 0.06 of its potential returns per unit of risk. Anax Metals is currently generating about -0.03 per unit of risk. If you would invest 3.80 in Aeris Environmental on August 30, 2024 and sell it today you would earn a total of 5.20 from holding Aeris Environmental or generate 136.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aeris Environmental vs. Anax Metals
Performance |
| Timeline |
| Aeris Environmental |
| Anax Metals |
Aeris Environmental and Anax Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aeris Environmental and Anax Metals
The main advantage of trading using opposite Aeris Environmental and Anax Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aeris Environmental position performs unexpectedly, Anax 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 Anax Metals will offset losses from the drop in Anax Metals' long position.| Aeris Environmental vs. Aneka Tambang Tbk | Aeris Environmental vs. ANZ Group Holdings | Aeris Environmental vs. Australia and New | Aeris Environmental vs. Commonwealth Bank |
| Anax Metals vs. BlackWall Property Funds | Anax Metals vs. Carlton Investments | Anax Metals vs. Aeris Environmental | Anax Metals vs. Lendlease Group |
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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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