Correlation Between Aurelia Metals and Southern Cross
Can any of the company-specific risk be diversified away by investing in both Aurelia Metals and Southern Cross 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 Southern Cross into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aurelia Metals and Southern Cross Media, you can compare the effects of market volatilities on Aurelia Metals and Southern Cross 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 Southern Cross. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aurelia Metals and Southern Cross.
Diversification Opportunities for Aurelia Metals and Southern Cross
-0.26 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Aurelia and Southern is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Aurelia Metals and Southern Cross Media in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Southern Cross Media 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 Southern Cross. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Southern Cross Media has no effect on the direction of Aurelia Metals i.e., Aurelia Metals and Southern Cross go up and down completely randomly.
Pair Corralation between Aurelia Metals and Southern Cross
Assuming the 90 days trading horizon Aurelia Metals is expected to generate 2.49 times more return on investment than Southern Cross. However, Aurelia Metals is 2.49 times more volatile than Southern Cross Media. It trades about 0.02 of its potential returns per unit of risk. Southern Cross Media is currently generating about 0.05 per unit of risk. If you would invest 18.00 in Aurelia Metals on October 30, 2024 and sell it today you would earn a total of 0.00 from holding Aurelia Metals or generate 0.0% 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. Southern Cross Media
Performance |
| Timeline |
| Aurelia Metals |
| Southern Cross Media |
Aurelia Metals and Southern Cross Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aurelia Metals and Southern Cross
The main advantage of trading using opposite Aurelia Metals and Southern Cross positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aurelia Metals position performs unexpectedly, Southern Cross 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 Southern Cross will offset losses from the drop in Southern Cross' long position.| Aurelia Metals vs. Southern Hemisphere Mining | Aurelia Metals vs. Queste Communications | Aurelia Metals vs. Farm Pride Foods | Aurelia Metals vs. Hutchison Telecommunications |
| Southern Cross vs. Farm Pride Foods | Southern Cross vs. Data3 | Southern Cross vs. Beston Global Food | Southern Cross vs. AiMedia Technologies |
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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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