Correlation Between Aurelia Metals and Arcadia Minerals
Can any of the company-specific risk be diversified away by investing in both Aurelia Metals and Arcadia Minerals 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 Arcadia Minerals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aurelia Metals and Arcadia Minerals Ltd, you can compare the effects of market volatilities on Aurelia Metals and Arcadia Minerals 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 Arcadia Minerals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aurelia Metals and Arcadia Minerals.
Diversification Opportunities for Aurelia Metals and Arcadia Minerals
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Aurelia and Arcadia is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Aurelia Metals and Arcadia Minerals Ltd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Arcadia Minerals 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 Arcadia Minerals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Arcadia Minerals has no effect on the direction of Aurelia Metals i.e., Aurelia Metals and Arcadia Minerals go up and down completely randomly.
Pair Corralation between Aurelia Metals and Arcadia Minerals
Assuming the 90 days trading horizon Aurelia Metals is expected to generate 0.91 times more return on investment than Arcadia Minerals. However, Aurelia Metals is 1.1 times less risky than Arcadia Minerals. It trades about -0.05 of its potential returns per unit of risk. Arcadia Minerals Ltd is currently generating about -0.44 per unit of risk. If you would invest 18.00 in Aurelia Metals on September 5, 2024 and sell it today you would lose (1.00) from holding Aurelia Metals or give up 5.56% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Aurelia Metals vs. Arcadia Minerals Ltd
Performance |
| Timeline |
| Aurelia Metals |
| Arcadia Minerals |
Aurelia Metals and Arcadia Minerals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aurelia Metals and Arcadia Minerals
The main advantage of trading using opposite Aurelia Metals and Arcadia Minerals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aurelia Metals position performs unexpectedly, Arcadia Minerals 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 Arcadia Minerals will offset losses from the drop in Arcadia Minerals' long position.| Aurelia Metals vs. Northern Star Resources | Aurelia Metals vs. Evolution Mining | Aurelia Metals vs. Bluescope Steel | Aurelia Metals vs. Sandfire Resources NL |
| Arcadia Minerals vs. Sandon Capital Investments | Arcadia Minerals vs. Clime Investment Management | Arcadia Minerals vs. A1 Investments Resources | Arcadia Minerals vs. Steamships Trading |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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