Correlation Between Aurion Resources and Resolute Mining
Can any of the company-specific risk be diversified away by investing in both Aurion Resources and Resolute Mining 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 Resolute Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aurion Resources and Resolute Mining Limited, you can compare the effects of market volatilities on Aurion Resources and Resolute Mining 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 Resolute Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aurion Resources and Resolute Mining.
Diversification Opportunities for Aurion Resources and Resolute Mining
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Aurion and Resolute is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Aurion Resources and Resolute Mining Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Resolute Mining 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 Resolute Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Resolute Mining has no effect on the direction of Aurion Resources i.e., Aurion Resources and Resolute Mining go up and down completely randomly.
Pair Corralation between Aurion Resources and Resolute Mining
Assuming the 90 days horizon Aurion Resources is expected to generate 0.45 times more return on investment than Resolute Mining. However, Aurion Resources is 2.21 times less risky than Resolute Mining. It trades about 0.05 of its potential returns per unit of risk. Resolute Mining Limited is currently generating about -0.06 per unit of risk. If you would invest 39.00 in Aurion Resources on August 29, 2024 and sell it today you would earn a total of 3.00 from holding Aurion Resources or generate 7.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aurion Resources vs. Resolute Mining Limited
Performance |
| Timeline |
| Aurion Resources |
| Resolute Mining |
Aurion Resources and Resolute Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aurion Resources and Resolute Mining
The main advantage of trading using opposite Aurion Resources and Resolute Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aurion Resources position performs unexpectedly, Resolute Mining 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 Resolute Mining will offset losses from the drop in Resolute Mining's long position.| Aurion Resources vs. Minnova Corp | Aurion Resources vs. Argo Gold | Aurion Resources vs. Advance Gold Corp | Aurion Resources vs. Blue Star Gold |
| Resolute Mining vs. Aurion Resources | Resolute Mining vs. Minera Alamos | Resolute Mining vs. Rio2 Limited | Resolute Mining vs. Roscan Gold Corp |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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