Correlation Between Aurelia Metals and Viva Leisure
Can any of the company-specific risk be diversified away by investing in both Aurelia Metals and Viva Leisure 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 Viva Leisure into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aurelia Metals and Viva Leisure, you can compare the effects of market volatilities on Aurelia Metals and Viva Leisure 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 Viva Leisure. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aurelia Metals and Viva Leisure.
Diversification Opportunities for Aurelia Metals and Viva Leisure
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Aurelia and Viva is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Aurelia Metals and Viva Leisure in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Viva Leisure 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 Viva Leisure. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Viva Leisure has no effect on the direction of Aurelia Metals i.e., Aurelia Metals and Viva Leisure go up and down completely randomly.
Pair Corralation between Aurelia Metals and Viva Leisure
Assuming the 90 days trading horizon Aurelia Metals is expected to under-perform the Viva Leisure. In addition to that, Aurelia Metals is 1.7 times more volatile than Viva Leisure. It trades about -0.04 of its total potential returns per unit of risk. Viva Leisure is currently generating about 0.05 per unit of volatility. If you would invest 133.00 in Viva Leisure on September 3, 2024 and sell it today you would earn a total of 5.00 from holding Viva Leisure or generate 3.76% 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. Viva Leisure
Performance |
| Timeline |
| Aurelia Metals |
| Viva Leisure |
Aurelia Metals and Viva Leisure Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aurelia Metals and Viva Leisure
The main advantage of trading using opposite Aurelia Metals and Viva Leisure positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aurelia Metals position performs unexpectedly, Viva Leisure 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 Viva Leisure will offset losses from the drop in Viva Leisure'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 |
| Viva Leisure vs. Westpac Banking | Viva Leisure vs. Champion Iron | Viva Leisure vs. iShares Global Healthcare | Viva Leisure vs. Peel Mining |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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