Correlation Between Aurion Resources and Pan African
Can any of the company-specific risk be diversified away by investing in both Aurion Resources and Pan African 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 Pan African into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aurion Resources and Pan African Resources, you can compare the effects of market volatilities on Aurion Resources and Pan African 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 Pan African. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aurion Resources and Pan African.
Diversification Opportunities for Aurion Resources and Pan African
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Aurion and Pan is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Aurion Resources and Pan African Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pan African 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 Pan African. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pan African Resources has no effect on the direction of Aurion Resources i.e., Aurion Resources and Pan African go up and down completely randomly.
Pair Corralation between Aurion Resources and Pan African
Assuming the 90 days horizon Aurion Resources is expected to generate 2.64 times more return on investment than Pan African. However, Aurion Resources is 2.64 times more volatile than Pan African Resources. It trades about 0.04 of its potential returns per unit of risk. Pan African Resources is currently generating about -0.03 per unit of risk. If you would invest 41.00 in Aurion Resources on September 2, 2024 and sell it today you would earn a total of 2.00 from holding Aurion Resources or generate 4.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 98.46% |
| Values | Daily Returns |
Aurion Resources vs. Pan African Resources
Performance |
| Timeline |
| Aurion Resources |
| Pan African Resources |
Aurion Resources and Pan African Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aurion Resources and Pan African
The main advantage of trading using opposite Aurion Resources and Pan African positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aurion Resources position performs unexpectedly, Pan African 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 Pan African will offset losses from the drop in Pan African's long position.| Aurion Resources vs. South32 Limited | Aurion Resources vs. NioCorp Developments Ltd | Aurion Resources vs. HUMANA INC | Aurion Resources vs. SCOR PK |
| Pan African vs. Aurion Resources | Pan African vs. Rio2 Limited | Pan African vs. Palamina Corp | Pan African vs. Grande Portage Resources |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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