Correlation Between Aurelia Metals and Commonwealth Bank
Can any of the company-specific risk be diversified away by investing in both Aurelia Metals and Commonwealth Bank 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 Commonwealth Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aurelia Metals and Commonwealth Bank of, you can compare the effects of market volatilities on Aurelia Metals and Commonwealth Bank 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 Commonwealth Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aurelia Metals and Commonwealth Bank.
Diversification Opportunities for Aurelia Metals and Commonwealth Bank
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Aurelia and Commonwealth is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Aurelia Metals and Commonwealth Bank of in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Commonwealth Bank 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 Commonwealth Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Commonwealth Bank has no effect on the direction of Aurelia Metals i.e., Aurelia Metals and Commonwealth Bank go up and down completely randomly.
Pair Corralation between Aurelia Metals and Commonwealth Bank
Assuming the 90 days trading horizon Aurelia Metals is expected to generate 10.55 times more return on investment than Commonwealth Bank. However, Aurelia Metals is 10.55 times more volatile than Commonwealth Bank of. It trades about 0.01 of its potential returns per unit of risk. Commonwealth Bank of is currently generating about 0.06 per unit of risk. If you would invest 18.00 in Aurelia Metals on September 3, 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 | 100.0% |
| Values | Daily Returns |
Aurelia Metals vs. Commonwealth Bank of
Performance |
| Timeline |
| Aurelia Metals |
| Commonwealth Bank |
Aurelia Metals and Commonwealth Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aurelia Metals and Commonwealth Bank
The main advantage of trading using opposite Aurelia Metals and Commonwealth Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aurelia Metals position performs unexpectedly, Commonwealth Bank 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 Commonwealth Bank will offset losses from the drop in Commonwealth Bank's long position.| Aurelia Metals vs. Northern Star Resources | Aurelia Metals vs. Evolution Mining | Aurelia Metals vs. Bluescope Steel | Aurelia Metals vs. Aneka Tambang Tbk |
| Commonwealth Bank vs. Westpac Banking | Commonwealth Bank vs. Commonwealth Bank | Commonwealth Bank vs. Commonwealth Bank of | Commonwealth Bank vs. Australia and New |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
Other Complementary Tools
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. |