Correlation Between Aurelia Metals and BKI Investment
Can any of the company-specific risk be diversified away by investing in both Aurelia Metals and BKI Investment 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 BKI Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aurelia Metals and BKI Investment, you can compare the effects of market volatilities on Aurelia Metals and BKI Investment 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 BKI Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aurelia Metals and BKI Investment.
Diversification Opportunities for Aurelia Metals and BKI Investment
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Aurelia and BKI is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Aurelia Metals and BKI Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BKI Investment 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 BKI Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BKI Investment has no effect on the direction of Aurelia Metals i.e., Aurelia Metals and BKI Investment go up and down completely randomly.
Pair Corralation between Aurelia Metals and BKI Investment
Assuming the 90 days trading horizon Aurelia Metals is expected to under-perform the BKI Investment. In addition to that, Aurelia Metals is 6.74 times more volatile than BKI Investment. It trades about -0.11 of its total potential returns per unit of risk. BKI Investment is currently generating about 0.0 per unit of volatility. If you would invest 172.00 in BKI Investment on September 1, 2024 and sell it today you would earn a total of 0.00 from holding BKI Investment or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aurelia Metals vs. BKI Investment
Performance |
| Timeline |
| Aurelia Metals |
| BKI Investment |
Aurelia Metals and BKI Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aurelia Metals and BKI Investment
The main advantage of trading using opposite Aurelia Metals and BKI Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aurelia Metals position performs unexpectedly, BKI Investment 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 BKI Investment will offset losses from the drop in BKI Investment's long position.| Aurelia Metals vs. Northern Star Resources | Aurelia Metals vs. Evolution Mining | Aurelia Metals vs. Bluescope Steel | Aurelia Metals vs. Sandfire Resources NL |
| BKI Investment vs. GQG Partners DRC | BKI Investment vs. MFF Capital Investments | BKI Investment vs. Metrics Master Income | BKI Investment vs. L1 Long Short |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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