Correlation Between Aura Energy and Appia Energy
Can any of the company-specific risk be diversified away by investing in both Aura Energy and Appia Energy 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 Aura Energy and Appia Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aura Energy Limited and Appia Energy Corp, you can compare the effects of market volatilities on Aura Energy and Appia Energy 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 Aura Energy with a short position of Appia Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aura Energy and Appia Energy.
Diversification Opportunities for Aura Energy and Appia Energy
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Aura and Appia is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Aura Energy Limited and Appia Energy Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Appia Energy Corp and Aura Energy 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 Aura Energy Limited are associated (or correlated) with Appia Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Appia Energy Corp has no effect on the direction of Aura Energy i.e., Aura Energy and Appia Energy go up and down completely randomly.
Pair Corralation between Aura Energy and Appia Energy
Assuming the 90 days horizon Aura Energy Limited is expected to generate 1.63 times more return on investment than Appia Energy. However, Aura Energy is 1.63 times more volatile than Appia Energy Corp. It trades about 0.05 of its potential returns per unit of risk. Appia Energy Corp is currently generating about 0.01 per unit of risk. If you would invest 13.00 in Aura Energy Limited on August 29, 2024 and sell it today you would lose (2.00) from holding Aura Energy Limited or give up 15.38% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aura Energy Limited vs. Appia Energy Corp
Performance |
| Timeline |
| Aura Energy Limited |
| Appia Energy Corp |
Aura Energy and Appia Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aura Energy and Appia Energy
The main advantage of trading using opposite Aura Energy and Appia Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aura Energy position performs unexpectedly, Appia Energy 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 Appia Energy will offset losses from the drop in Appia Energy's long position.| Aura Energy vs. Elevate Uranium | Aura Energy vs. Baselode Energy Corp | Aura Energy vs. Peninsula Energy | Aura Energy vs. Forsys Metals Corp |
| Appia Energy vs. Anfield Resources | Appia Energy vs. Purepoint Uranium Group | Appia Energy vs. Bannerman Resources | Appia Energy vs. Standard Uranium |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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