Correlation Between Argosy Minerals and Aurelia Metals
Can any of the company-specific risk be diversified away by investing in both Argosy Minerals and Aurelia Metals 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 Argosy Minerals and Aurelia Metals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Argosy Minerals Limited and Aurelia Metals Limited, you can compare the effects of market volatilities on Argosy Minerals and Aurelia Metals 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 Argosy Minerals with a short position of Aurelia Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Argosy Minerals and Aurelia Metals.
Diversification Opportunities for Argosy Minerals and Aurelia Metals
-0.04 | Correlation Coefficient |
Good diversification
The 3 months correlation between Argosy and Aurelia is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Argosy Minerals Limited and Aurelia Metals Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aurelia Metals and Argosy Minerals 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 Argosy Minerals Limited are associated (or correlated) with Aurelia Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aurelia Metals has no effect on the direction of Argosy Minerals i.e., Argosy Minerals and Aurelia Metals go up and down completely randomly.
Pair Corralation between Argosy Minerals and Aurelia Metals
Assuming the 90 days horizon Argosy Minerals Limited is expected to under-perform the Aurelia Metals. But the pink sheet apears to be less risky and, when comparing its historical volatility, Argosy Minerals Limited is 1.4 times less risky than Aurelia Metals. The pink sheet trades about -0.06 of its potential returns per unit of risk. The Aurelia Metals Limited is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 9.00 in Aurelia Metals Limited on September 2, 2024 and sell it today you would earn a total of 6.00 from holding Aurelia Metals Limited or generate 66.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.73% |
| Values | Daily Returns |
Argosy Minerals Limited vs. Aurelia Metals Limited
Performance |
| Timeline |
| Argosy Minerals |
| Aurelia Metals |
Argosy Minerals and Aurelia Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Argosy Minerals and Aurelia Metals
The main advantage of trading using opposite Argosy Minerals and Aurelia Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Argosy Minerals position performs unexpectedly, Aurelia Metals 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 Aurelia Metals will offset losses from the drop in Aurelia Metals' long position.| Argosy Minerals vs. ATT Inc | Argosy Minerals vs. Merck Company | Argosy Minerals vs. Walt Disney | Argosy Minerals vs. Caterpillar |
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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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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