Correlation Between Aurelia Metals and Iodm
Can any of the company-specific risk be diversified away by investing in both Aurelia Metals and Iodm 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 Iodm into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aurelia Metals and Iodm, you can compare the effects of market volatilities on Aurelia Metals and Iodm 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 Iodm. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aurelia Metals and Iodm.
Diversification Opportunities for Aurelia Metals and Iodm
-0.12 | Correlation Coefficient |
Good diversification
The 3 months correlation between Aurelia and Iodm is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Aurelia Metals and Iodm in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Iodm 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 Iodm. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Iodm has no effect on the direction of Aurelia Metals i.e., Aurelia Metals and Iodm go up and down completely randomly.
Pair Corralation between Aurelia Metals and Iodm
Assuming the 90 days trading horizon Aurelia Metals is expected to generate 0.99 times more return on investment than Iodm. However, Aurelia Metals is 1.01 times less risky than Iodm. It trades about -0.11 of its potential returns per unit of risk. Iodm is currently generating about -0.12 per unit of risk. If you would invest 19.00 in Aurelia Metals on September 1, 2024 and sell it today you would lose (2.00) from holding Aurelia Metals or give up 10.53% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aurelia Metals vs. Iodm
Performance |
| Timeline |
| Aurelia Metals |
| Iodm |
Aurelia Metals and Iodm Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aurelia Metals and Iodm
The main advantage of trading using opposite Aurelia Metals and Iodm positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aurelia Metals position performs unexpectedly, Iodm 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 Iodm will offset losses from the drop in Iodm'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 |
| Iodm vs. Phoslock Environmental Technologies | Iodm vs. Aurelia Metals | Iodm vs. ACDC Metals | Iodm vs. DY6 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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