Correlation Between Austral Gold and Aurelia Metals
Can any of the company-specific risk be diversified away by investing in both Austral Gold 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 Austral Gold and Aurelia Metals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Austral Gold and Aurelia Metals, you can compare the effects of market volatilities on Austral Gold 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 Austral Gold with a short position of Aurelia Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Austral Gold and Aurelia Metals.
Diversification Opportunities for Austral Gold and Aurelia Metals
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Austral and Aurelia is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Austral Gold and Aurelia Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aurelia Metals and Austral Gold 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 Austral Gold 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 Austral Gold i.e., Austral Gold and Aurelia Metals go up and down completely randomly.
Pair Corralation between Austral Gold and Aurelia Metals
Assuming the 90 days trading horizon Austral Gold is expected to under-perform the Aurelia Metals. In addition to that, Austral Gold is 2.13 times more volatile than Aurelia Metals. It trades about -0.03 of its total potential returns per unit of risk. Aurelia Metals is currently generating about 0.25 per unit of volatility. If you would invest 18.00 in Aurelia Metals on November 27, 2024 and sell it today you would earn a total of 4.00 from holding Aurelia Metals or generate 22.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Austral Gold vs. Aurelia Metals
Performance |
| Timeline |
| Austral Gold |
| Aurelia Metals |
Austral Gold and Aurelia Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Austral Gold and Aurelia Metals
The main advantage of trading using opposite Austral Gold and Aurelia Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Austral Gold 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.| Austral Gold vs. Champion Iron | Austral Gold vs. Advanced Braking Technology | Austral Gold vs. Spirit Telecom | Austral Gold vs. Clime Investment Management |
| Aurelia Metals vs. K2 Asset Management | Aurelia Metals vs. Perpetual Credit Income | Aurelia Metals vs. BSP Financial Group | Aurelia Metals vs. Cleanaway Waste Management |
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 Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
Other Complementary Tools
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| Global Correlations Find global opportunities by holding instruments from different markets |