Correlation Between Aurania Resources and Cartier Resources
Can any of the company-specific risk be diversified away by investing in both Aurania Resources and Cartier Resources 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 Aurania Resources and Cartier Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aurania Resources and Cartier Resources, you can compare the effects of market volatilities on Aurania Resources and Cartier Resources 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 Aurania Resources with a short position of Cartier Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aurania Resources and Cartier Resources.
Diversification Opportunities for Aurania Resources and Cartier Resources
0.1 | Correlation Coefficient |
Average diversification
The 3 months correlation between Aurania and Cartier is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Aurania Resources and Cartier Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cartier Resources and Aurania 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 Aurania Resources are associated (or correlated) with Cartier Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cartier Resources has no effect on the direction of Aurania Resources i.e., Aurania Resources and Cartier Resources go up and down completely randomly.
Pair Corralation between Aurania Resources and Cartier Resources
Assuming the 90 days horizon Aurania Resources is expected to under-perform the Cartier Resources. In addition to that, Aurania Resources is 1.02 times more volatile than Cartier Resources. It trades about -0.35 of its total potential returns per unit of risk. Cartier Resources is currently generating about -0.29 per unit of volatility. If you would invest 12.00 in Cartier Resources on August 29, 2024 and sell it today you would lose (3.00) from holding Cartier Resources or give up 25.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aurania Resources vs. Cartier Resources
Performance |
| Timeline |
| Aurania Resources |
| Cartier Resources |
Aurania Resources and Cartier Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aurania Resources and Cartier Resources
The main advantage of trading using opposite Aurania Resources and Cartier Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aurania Resources position performs unexpectedly, Cartier Resources 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 Cartier Resources will offset losses from the drop in Cartier Resources' long position.| Aurania Resources vs. Primaris Retail RE | Aurania Resources vs. Canso Select Opportunities | Aurania Resources vs. Champion Gaming Group | Aurania Resources vs. Perseus Mining |
| Cartier Resources vs. First Majestic Silver | Cartier Resources vs. Ivanhoe Energy | Cartier Resources vs. Orezone Gold Corp | Cartier Resources vs. Faraday Copper Corp |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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