Correlation Between Autosports and Aurelia Metals
Can any of the company-specific risk be diversified away by investing in both Autosports 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 Autosports and Aurelia Metals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Autosports Group and Aurelia Metals, you can compare the effects of market volatilities on Autosports 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 Autosports with a short position of Aurelia Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Autosports and Aurelia Metals.
Diversification Opportunities for Autosports and Aurelia Metals
-0.18 | Correlation Coefficient |
Good diversification
The 3 months correlation between Autosports and Aurelia is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Autosports Group and Aurelia Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aurelia Metals and Autosports 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 Autosports Group 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 Autosports i.e., Autosports and Aurelia Metals go up and down completely randomly.
Pair Corralation between Autosports and Aurelia Metals
Assuming the 90 days trading horizon Autosports Group is expected to under-perform the Aurelia Metals. But the stock apears to be less risky and, when comparing its historical volatility, Autosports Group is 4.4 times less risky than Aurelia Metals. The stock trades about -0.15 of its potential returns per unit of risk. The Aurelia Metals is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 18.00 in Aurelia Metals on November 4, 2024 and sell it today you would earn a total of 1.00 from holding Aurelia Metals or generate 5.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Autosports Group vs. Aurelia Metals
Performance |
| Timeline |
| Autosports Group |
| Aurelia Metals |
Autosports and Aurelia Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Autosports and Aurelia Metals
The main advantage of trading using opposite Autosports and Aurelia Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Autosports 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.| Autosports vs. Centrex Metals | Autosports vs. FireFly Metals | Autosports vs. Cosmo Metals | Autosports vs. Champion Iron |
| Aurelia Metals vs. Credit Clear | Aurelia Metals vs. Regal Funds Management | Aurelia Metals vs. Insignia Financial | Aurelia Metals vs. Black Rock 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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