Correlation Between Aurelia Metals and Truscott Mining
Can any of the company-specific risk be diversified away by investing in both Aurelia Metals and Truscott Mining 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 Truscott Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aurelia Metals and Truscott Mining Corp, you can compare the effects of market volatilities on Aurelia Metals and Truscott Mining 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 Truscott Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aurelia Metals and Truscott Mining.
Diversification Opportunities for Aurelia Metals and Truscott Mining
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Aurelia and Truscott is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Aurelia Metals and Truscott Mining Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Truscott Mining Corp 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 Truscott Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Truscott Mining Corp has no effect on the direction of Aurelia Metals i.e., Aurelia Metals and Truscott Mining go up and down completely randomly.
Pair Corralation between Aurelia Metals and Truscott Mining
Assuming the 90 days trading horizon Aurelia Metals is expected to generate 1.41 times less return on investment than Truscott Mining. In addition to that, Aurelia Metals is 1.28 times more volatile than Truscott Mining Corp. It trades about 0.07 of its total potential returns per unit of risk. Truscott Mining Corp is currently generating about 0.12 per unit of volatility. If you would invest 6.00 in Truscott Mining Corp on November 2, 2024 and sell it today you would earn a total of 3.00 from holding Truscott Mining Corp or generate 50.0% 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. Truscott Mining Corp
Performance |
| Timeline |
| Aurelia Metals |
| Truscott Mining Corp |
Aurelia Metals and Truscott Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aurelia Metals and Truscott Mining
The main advantage of trading using opposite Aurelia Metals and Truscott Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aurelia Metals position performs unexpectedly, Truscott Mining 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 Truscott Mining will offset losses from the drop in Truscott Mining's long position.| Aurelia Metals vs. Centuria Industrial Reit | Aurelia Metals vs. Autosports Group | Aurelia Metals vs. Group 6 Metals | Aurelia Metals vs. Collins Foods |
| Truscott Mining vs. Charter Hall Retail | Truscott Mining vs. Auswide Bank | Truscott Mining vs. BSP Financial Group | Truscott Mining vs. Magellan Financial Group |
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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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