Correlation Between Aura Energy and Blue Sky
Can any of the company-specific risk be diversified away by investing in both Aura Energy and Blue Sky 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 Blue Sky 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 Blue Sky Uranium, you can compare the effects of market volatilities on Aura Energy and Blue Sky 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 Blue Sky. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aura Energy and Blue Sky.
Diversification Opportunities for Aura Energy and Blue Sky
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Aura and Blue is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Aura Energy Limited and Blue Sky Uranium in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Blue Sky Uranium 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 Blue Sky. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Blue Sky Uranium has no effect on the direction of Aura Energy i.e., Aura Energy and Blue Sky go up and down completely randomly.
Pair Corralation between Aura Energy and Blue Sky
Assuming the 90 days horizon Aura Energy Limited is expected to generate 1.08 times more return on investment than Blue Sky. However, Aura Energy is 1.08 times more volatile than Blue Sky Uranium. It trades about 0.06 of its potential returns per unit of risk. Blue Sky Uranium is currently generating about 0.04 per unit of risk. If you would invest 12.00 in Aura Energy Limited on August 25, 2024 and sell it today you would lose (1.00) from holding Aura Energy Limited or give up 8.33% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Aura Energy Limited vs. Blue Sky Uranium
Performance |
| Timeline |
| Aura Energy Limited |
| Blue Sky Uranium |
Aura Energy and Blue Sky Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aura Energy and Blue Sky
The main advantage of trading using opposite Aura Energy and Blue Sky positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aura Energy position performs unexpectedly, Blue Sky 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 Blue Sky will offset losses from the drop in Blue Sky's long position.| Aura Energy vs. Isoenergy | Aura Energy vs. Paladin Energy | Aura Energy vs. F3 Uranium Corp | Aura Energy vs. enCore Energy Corp |
| Blue Sky vs. Petroleo Brasileiro Petrobras | Blue Sky vs. Equinor ASA ADR | Blue Sky vs. Eni SpA ADR | Blue Sky vs. YPF Sociedad Anonima |
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 CEOs Directory module to screen CEOs from public companies around the world.
Other Complementary Tools
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk |