Correlation Between Aura Energy and Standard Uranium
Can any of the company-specific risk be diversified away by investing in both Aura Energy and Standard Uranium 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 Standard Uranium 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 Standard Uranium, you can compare the effects of market volatilities on Aura Energy and Standard Uranium 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 Standard Uranium. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aura Energy and Standard Uranium.
Diversification Opportunities for Aura Energy and Standard Uranium
-0.04 | Correlation Coefficient |
Good diversification
The 3 months correlation between Aura and Standard is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Aura Energy Limited and Standard Uranium in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Standard 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 Standard Uranium. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Standard Uranium has no effect on the direction of Aura Energy i.e., Aura Energy and Standard Uranium go up and down completely randomly.
Pair Corralation between Aura Energy and Standard Uranium
Assuming the 90 days horizon Aura Energy Limited is expected to generate 1.61 times more return on investment than Standard Uranium. However, Aura Energy is 1.61 times more volatile than Standard Uranium. It trades about 0.03 of its potential returns per unit of risk. Standard Uranium is currently generating about -0.02 per unit of risk. If you would invest 22.00 in Aura Energy Limited on September 1, 2024 and sell it today you would lose (11.00) from holding Aura Energy Limited or give up 50.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.63% |
| Values | Daily Returns |
Aura Energy Limited vs. Standard Uranium
Performance |
| Timeline |
| Aura Energy Limited |
| Standard Uranium |
Aura Energy and Standard Uranium Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aura Energy and Standard Uranium
The main advantage of trading using opposite Aura Energy and Standard Uranium positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aura Energy position performs unexpectedly, Standard Uranium 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 Standard Uranium will offset losses from the drop in Standard Uranium's long position.| Aura Energy vs. Isoenergy | Aura Energy vs. Paladin Energy | Aura Energy vs. F3 Uranium Corp | Aura Energy vs. enCore Energy Corp |
| Standard Uranium vs. Isoenergy | Standard Uranium vs. Paladin Energy | Standard Uranium vs. F3 Uranium Corp | Standard Uranium vs. enCore Energy 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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