Correlation Between Aurelia Metals and 88 Energy
Can any of the company-specific risk be diversified away by investing in both Aurelia Metals and 88 Energy 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 Aurelia Metals and 88 Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aurelia Metals and 88 Energy, you can compare the effects of market volatilities on Aurelia Metals and 88 Energy 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 Aurelia Metals with a short position of 88 Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aurelia Metals and 88 Energy.
Diversification Opportunities for Aurelia Metals and 88 Energy
0.15 | Correlation Coefficient |
Average diversification
The 3 months correlation between Aurelia and 88E is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Aurelia Metals and 88 Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on 88 Energy and Aurelia Metals 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 Aurelia Metals are associated (or correlated) with 88 Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of 88 Energy has no effect on the direction of Aurelia Metals i.e., Aurelia Metals and 88 Energy go up and down completely randomly.
Pair Corralation between Aurelia Metals and 88 Energy
Assuming the 90 days trading horizon Aurelia Metals is expected to generate 18.75 times less return on investment than 88 Energy. But when comparing it to its historical volatility, Aurelia Metals is 9.01 times less risky than 88 Energy. It trades about 0.08 of its potential returns per unit of risk. 88 Energy is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest 0.20 in 88 Energy on October 28, 2024 and sell it today you would earn a total of 0.00 from holding 88 Energy or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aurelia Metals vs. 88 Energy
Performance |
| Timeline |
| Aurelia Metals |
| 88 Energy |
Aurelia Metals and 88 Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aurelia Metals and 88 Energy
The main advantage of trading using opposite Aurelia Metals and 88 Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aurelia Metals position performs unexpectedly, 88 Energy 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 88 Energy will offset losses from the drop in 88 Energy's long position.| Aurelia Metals vs. Retail Food Group | Aurelia Metals vs. ABACUS STORAGE KING | Aurelia Metals vs. Sports Entertainment Group | Aurelia Metals vs. Data3 |
| 88 Energy vs. Fisher Paykel Healthcare | 88 Energy vs. TPG Telecom | 88 Energy vs. WiseTech Global Limited | 88 Energy vs. Home Consortium |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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