Correlation Between Artemis Resources and Australian Mines
Can any of the company-specific risk be diversified away by investing in both Artemis Resources and Australian Mines 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 Artemis Resources and Australian Mines into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Artemis Resources and Australian Mines Limited, you can compare the effects of market volatilities on Artemis Resources and Australian Mines 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 Artemis Resources with a short position of Australian Mines. Check out your portfolio center. Please also check ongoing floating volatility patterns of Artemis Resources and Australian Mines.
Diversification Opportunities for Artemis Resources and Australian Mines
-0.22 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Artemis and Australian is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding Artemis Resources and Australian Mines Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Australian Mines and Artemis Resources 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 Artemis Resources are associated (or correlated) with Australian Mines. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Australian Mines has no effect on the direction of Artemis Resources i.e., Artemis Resources and Australian Mines go up and down completely randomly.
Pair Corralation between Artemis Resources and Australian Mines
Assuming the 90 days horizon Artemis Resources is expected to under-perform the Australian Mines. But the pink sheet apears to be less risky and, when comparing its historical volatility, Artemis Resources is 7.99 times less risky than Australian Mines. The pink sheet trades about -0.05 of its potential returns per unit of risk. The Australian Mines Limited is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest 1.69 in Australian Mines Limited on August 29, 2024 and sell it today you would lose (0.78) from holding Australian Mines Limited or give up 46.15% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Artemis Resources vs. Australian Mines Limited
Performance |
| Timeline |
| Artemis Resources |
| Australian Mines |
Artemis Resources and Australian Mines Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Artemis Resources and Australian Mines
The main advantage of trading using opposite Artemis Resources and Australian Mines positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Artemis Resources position performs unexpectedly, Australian Mines 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 Australian Mines will offset losses from the drop in Australian Mines' long position.| Artemis Resources vs. Edison Cobalt Corp | Artemis Resources vs. Champion Bear Resources | Artemis Resources vs. Avarone Metals | Artemis Resources vs. Adriatic Metals PLC |
| Australian Mines vs. Aurelia Metals Limited | Australian Mines vs. Artemis Resources | Australian Mines vs. Ascendant Resources | Australian Mines vs. Azimut Exploration |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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