Correlation Between Aurelia Metals and Johns Lyng
Can any of the company-specific risk be diversified away by investing in both Aurelia Metals and Johns Lyng 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 Johns Lyng into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aurelia Metals and Johns Lyng Group, you can compare the effects of market volatilities on Aurelia Metals and Johns Lyng 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 Johns Lyng. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aurelia Metals and Johns Lyng.
Diversification Opportunities for Aurelia Metals and Johns Lyng
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Aurelia and Johns is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Aurelia Metals and Johns Lyng Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Johns Lyng Group 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 Johns Lyng. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Johns Lyng Group has no effect on the direction of Aurelia Metals i.e., Aurelia Metals and Johns Lyng go up and down completely randomly.
Pair Corralation between Aurelia Metals and Johns Lyng
Assuming the 90 days trading horizon Aurelia Metals is expected to generate 2.78 times more return on investment than Johns Lyng. However, Aurelia Metals is 2.78 times more volatile than Johns Lyng Group. It trades about 0.08 of its potential returns per unit of risk. Johns Lyng Group is currently generating about -0.25 per unit of risk. If you would invest 18.00 in Aurelia Metals on September 13, 2024 and sell it today you would earn a total of 1.00 from holding Aurelia Metals or generate 5.56% 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. Johns Lyng Group
Performance |
| Timeline |
| Aurelia Metals |
| Johns Lyng Group |
Aurelia Metals and Johns Lyng Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aurelia Metals and Johns Lyng
The main advantage of trading using opposite Aurelia Metals and Johns Lyng positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aurelia Metals position performs unexpectedly, Johns Lyng 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 Johns Lyng will offset losses from the drop in Johns Lyng's long position.| Aurelia Metals vs. The Environmental Group | Aurelia Metals vs. Ramsay Health Care | Aurelia Metals vs. Aussie Broadband | Aurelia Metals vs. Tombador Iron |
| Johns Lyng vs. Patriot Battery Metals | Johns Lyng vs. Group 6 Metals | Johns Lyng vs. Ainsworth Game Technology | Johns Lyng vs. Capitol Health |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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