Correlation Between Aurion Resources and GFG Resources
Can any of the company-specific risk be diversified away by investing in both Aurion Resources and GFG Resources 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 Aurion Resources and GFG Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aurion Resources and GFG Resources, you can compare the effects of market volatilities on Aurion Resources and GFG Resources 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 Aurion Resources with a short position of GFG Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aurion Resources and GFG Resources.
Diversification Opportunities for Aurion Resources and GFG Resources
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Aurion and GFG is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Aurion Resources and GFG Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GFG Resources and Aurion 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 Aurion Resources are associated (or correlated) with GFG Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GFG Resources has no effect on the direction of Aurion Resources i.e., Aurion Resources and GFG Resources go up and down completely randomly.
Pair Corralation between Aurion Resources and GFG Resources
Assuming the 90 days horizon Aurion Resources is expected to generate 1.08 times more return on investment than GFG Resources. However, Aurion Resources is 1.08 times more volatile than GFG Resources. It trades about -0.07 of its potential returns per unit of risk. GFG Resources is currently generating about -0.2 per unit of risk. If you would invest 46.00 in Aurion Resources on September 3, 2024 and sell it today you would lose (3.00) from holding Aurion Resources or give up 6.52% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
Aurion Resources vs. GFG Resources
Performance |
| Timeline |
| Aurion Resources |
| GFG Resources |
Aurion Resources and GFG Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aurion Resources and GFG Resources
The main advantage of trading using opposite Aurion Resources and GFG Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aurion Resources position performs unexpectedly, GFG Resources 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 GFG Resources will offset losses from the drop in GFG Resources' long position.| Aurion Resources vs. Minnova Corp | Aurion Resources vs. Argo Gold | Aurion Resources vs. Advance Gold Corp | Aurion Resources vs. Blue Star Gold |
| GFG Resources vs. Harmony Gold Mining | GFG Resources vs. SPACE | GFG Resources vs. T Rowe Price | GFG Resources vs. Ampleforth |
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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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