Correlation Between Aurelia Metals and Cooper Metals
Can any of the company-specific risk be diversified away by investing in both Aurelia Metals and Cooper Metals 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 Cooper Metals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aurelia Metals and Cooper Metals, you can compare the effects of market volatilities on Aurelia Metals and Cooper Metals 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 Cooper Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aurelia Metals and Cooper Metals.
Diversification Opportunities for Aurelia Metals and Cooper Metals
-0.15 | Correlation Coefficient |
Good diversification
The 3 months correlation between Aurelia and Cooper is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Aurelia Metals and Cooper Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cooper Metals 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 Cooper Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cooper Metals has no effect on the direction of Aurelia Metals i.e., Aurelia Metals and Cooper Metals go up and down completely randomly.
Pair Corralation between Aurelia Metals and Cooper Metals
Assuming the 90 days trading horizon Aurelia Metals is expected to generate 1.16 times more return on investment than Cooper Metals. However, Aurelia Metals is 1.16 times more volatile than Cooper Metals. It trades about 0.08 of its potential returns per unit of risk. Cooper Metals is currently generating about -0.05 per unit of risk. If you would invest 17.00 in Aurelia Metals on September 14, 2024 and sell it today you would earn a total of 1.00 from holding Aurelia Metals or generate 5.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aurelia Metals vs. Cooper Metals
Performance |
| Timeline |
| Aurelia Metals |
| Cooper Metals |
Aurelia Metals and Cooper Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aurelia Metals and Cooper Metals
The main advantage of trading using opposite Aurelia Metals and Cooper Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aurelia Metals position performs unexpectedly, Cooper Metals 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 Cooper Metals will offset losses from the drop in Cooper Metals' long position.| Aurelia Metals vs. Health and Plant | Aurelia Metals vs. BTC Health Limited | Aurelia Metals vs. Fisher Paykel Healthcare | Aurelia Metals vs. Sonic Healthcare |
| Cooper Metals vs. TPG Telecom | Cooper Metals vs. ACDC Metals | Cooper Metals vs. Lendlease Group | Cooper Metals vs. Hutchison Telecommunications |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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