Correlation Between Aurelia Metals and Green Technology
Can any of the company-specific risk be diversified away by investing in both Aurelia Metals and Green Technology 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 Green Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aurelia Metals and Green Technology Metals, you can compare the effects of market volatilities on Aurelia Metals and Green Technology 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 Green Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aurelia Metals and Green Technology.
Diversification Opportunities for Aurelia Metals and Green Technology
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Aurelia and Green is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Aurelia Metals and Green Technology Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Green Technology 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 Green Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Green Technology Metals has no effect on the direction of Aurelia Metals i.e., Aurelia Metals and Green Technology go up and down completely randomly.
Pair Corralation between Aurelia Metals and Green Technology
Assuming the 90 days trading horizon Aurelia Metals is expected to generate 0.81 times more return on investment than Green Technology. However, Aurelia Metals is 1.23 times less risky than Green Technology. It trades about 0.07 of its potential returns per unit of risk. Green Technology Metals is currently generating about -0.08 per unit of risk. If you would invest 11.00 in Aurelia Metals on September 12, 2024 and sell it today you would earn a total of 8.00 from holding Aurelia Metals or generate 72.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aurelia Metals vs. Green Technology Metals
Performance |
| Timeline |
| Aurelia Metals |
| Green Technology Metals |
Aurelia Metals and Green Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aurelia Metals and Green Technology
The main advantage of trading using opposite Aurelia Metals and Green Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aurelia Metals position performs unexpectedly, Green Technology 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 Green Technology will offset losses from the drop in Green Technology's long position.| Aurelia Metals vs. Legacy Iron Ore | Aurelia Metals vs. Mount Gibson Iron | Aurelia Metals vs. Retail Food Group | Aurelia Metals vs. Australian Agricultural |
| Green Technology vs. Aurelia Metals | Green Technology vs. National Australia Bank | Green Technology vs. Truscott Mining Corp | Green Technology vs. Global Data Centre |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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