Correlation Between Aeon Metals and Health
Can any of the company-specific risk be diversified away by investing in both Aeon Metals and Health 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 Aeon Metals and Health into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aeon Metals and Health and Plant, you can compare the effects of market volatilities on Aeon Metals and Health 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 Aeon Metals with a short position of Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aeon Metals and Health.
Diversification Opportunities for Aeon Metals and Health
-1.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Aeon and Health is -1.0. Overlapping area represents the amount of risk that can be diversified away by holding Aeon Metals and Health and Plant in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Health and Plant and Aeon 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 Aeon Metals are associated (or correlated) with Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Health and Plant has no effect on the direction of Aeon Metals i.e., Aeon Metals and Health go up and down completely randomly.
Pair Corralation between Aeon Metals and Health
If you would invest 1.10 in Aeon Metals on September 1, 2024 and sell it today you would lose (0.60) from holding Aeon Metals or give up 54.55% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aeon Metals vs. Health and Plant
Performance |
| Timeline |
| Aeon Metals |
| Health and Plant |
Aeon Metals and Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aeon Metals and Health
The main advantage of trading using opposite Aeon Metals and Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aeon Metals position performs unexpectedly, Health 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 Health will offset losses from the drop in Health's long position.| Aeon Metals vs. Northern Star Resources | Aeon Metals vs. Evolution Mining | Aeon Metals vs. Bluescope Steel | Aeon Metals vs. Sandfire Resources NL |
| Health vs. Stelar Metals | Health vs. REGAL ASIAN INVESTMENTS | Health vs. Flagship Investments | Health vs. A1 Investments Resources |
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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