Correlation Between Aurelia Metals and Super Retail
Can any of the company-specific risk be diversified away by investing in both Aurelia Metals and Super Retail 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 Super Retail into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aurelia Metals and Super Retail Group, you can compare the effects of market volatilities on Aurelia Metals and Super Retail 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 Super Retail. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aurelia Metals and Super Retail.
Diversification Opportunities for Aurelia Metals and Super Retail
-0.17 | Correlation Coefficient |
Good diversification
The 3 months correlation between Aurelia and Super is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Aurelia Metals and Super Retail Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Super Retail 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 Super Retail. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Super Retail Group has no effect on the direction of Aurelia Metals i.e., Aurelia Metals and Super Retail go up and down completely randomly.
Pair Corralation between Aurelia Metals and Super Retail
Assuming the 90 days trading horizon Aurelia Metals is expected to under-perform the Super Retail. In addition to that, Aurelia Metals is 2.37 times more volatile than Super Retail Group. It trades about -0.11 of its total potential returns per unit of risk. Super Retail Group is currently generating about -0.12 per unit of volatility. If you would invest 1,518 in Super Retail Group on August 26, 2024 and sell it today you would lose (68.00) from holding Super Retail Group or give up 4.48% 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. Super Retail Group
Performance |
| Timeline |
| Aurelia Metals |
| Super Retail Group |
Aurelia Metals and Super Retail Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aurelia Metals and Super Retail
The main advantage of trading using opposite Aurelia Metals and Super Retail positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aurelia Metals position performs unexpectedly, Super Retail 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 Super Retail will offset losses from the drop in Super Retail's long position.| Aurelia Metals vs. Northern Star Resources | Aurelia Metals vs. Evolution Mining | Aurelia Metals vs. Bluescope Steel | Aurelia Metals vs. Aneka Tambang Tbk |
| Super Retail vs. Skycity Entertainment Group | Super Retail vs. ABACUS STORAGE KING | Super Retail vs. Vulcan Steel | Super Retail vs. My Foodie Box |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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