Correlation Between Aurelia Metals and Charter Hall
Can any of the company-specific risk be diversified away by investing in both Aurelia Metals and Charter Hall 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 Charter Hall into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aurelia Metals and Charter Hall Long, you can compare the effects of market volatilities on Aurelia Metals and Charter Hall 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 Charter Hall. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aurelia Metals and Charter Hall.
Diversification Opportunities for Aurelia Metals and Charter Hall
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Aurelia and Charter is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Aurelia Metals and Charter Hall Long in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Charter Hall Long 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 Charter Hall. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Charter Hall Long has no effect on the direction of Aurelia Metals i.e., Aurelia Metals and Charter Hall go up and down completely randomly.
Pair Corralation between Aurelia Metals and Charter Hall
Assuming the 90 days trading horizon Aurelia Metals is expected to under-perform the Charter Hall. In addition to that, Aurelia Metals is 3.47 times more volatile than Charter Hall Long. It trades about -0.11 of its total potential returns per unit of risk. Charter Hall Long is currently generating about 0.14 per unit of volatility. If you would invest 390.00 in Charter Hall Long on September 1, 2024 and sell it today you would earn a total of 14.00 from holding Charter Hall Long or generate 3.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Aurelia Metals vs. Charter Hall Long
Performance |
| Timeline |
| Aurelia Metals |
| Charter Hall Long |
Aurelia Metals and Charter Hall Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aurelia Metals and Charter Hall
The main advantage of trading using opposite Aurelia Metals and Charter Hall positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aurelia Metals position performs unexpectedly, Charter Hall 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 Charter Hall will offset losses from the drop in Charter Hall'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 |
| Charter Hall vs. Aurelia Metals | Charter Hall vs. Regal Funds Management | Charter Hall vs. Truscott Mining Corp | Charter Hall vs. Centaurus Metals |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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