Correlation Between Aspire Mining and Southern Cross
Can any of the company-specific risk be diversified away by investing in both Aspire Mining and Southern Cross 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 Aspire Mining and Southern Cross into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aspire Mining and Southern Cross Gold, you can compare the effects of market volatilities on Aspire Mining and Southern Cross 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 Aspire Mining with a short position of Southern Cross. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aspire Mining and Southern Cross.
Diversification Opportunities for Aspire Mining and Southern Cross
0.14 | Correlation Coefficient |
Average diversification
The 3 months correlation between Aspire and Southern is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Aspire Mining and Southern Cross Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Southern Cross Gold and Aspire Mining 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 Aspire Mining are associated (or correlated) with Southern Cross. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Southern Cross Gold has no effect on the direction of Aspire Mining i.e., Aspire Mining and Southern Cross go up and down completely randomly.
Pair Corralation between Aspire Mining and Southern Cross
Assuming the 90 days trading horizon Aspire Mining is expected to generate 3.4 times less return on investment than Southern Cross. But when comparing it to its historical volatility, Aspire Mining is 1.54 times less risky than Southern Cross. It trades about 0.02 of its potential returns per unit of risk. Southern Cross Gold is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 317.00 in Southern Cross Gold on September 4, 2024 and sell it today you would earn a total of 6.00 from holding Southern Cross Gold or generate 1.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aspire Mining vs. Southern Cross Gold
Performance |
| Timeline |
| Aspire Mining |
| Southern Cross Gold |
Aspire Mining and Southern Cross Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aspire Mining and Southern Cross
The main advantage of trading using opposite Aspire Mining and Southern Cross positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aspire Mining position performs unexpectedly, Southern Cross 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 Southern Cross will offset losses from the drop in Southern Cross' long position.| Aspire Mining vs. Westpac Banking | Aspire Mining vs. Microequities Asset Management | Aspire Mining vs. Steamships Trading | Aspire Mining vs. Argo Investments |
| Southern Cross vs. Carnegie Clean Energy | Southern Cross vs. Aristocrat Leisure | Southern Cross vs. Centaurus Metals | Southern Cross vs. Perseus Mining |
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 Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
Other Complementary Tools
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities |