Correlation Between Aumake and Premier Investments
Can any of the company-specific risk be diversified away by investing in both Aumake and Premier Investments 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 Aumake and Premier Investments into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aumake and Premier Investments, you can compare the effects of market volatilities on Aumake and Premier Investments 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 Aumake with a short position of Premier Investments. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aumake and Premier Investments.
Diversification Opportunities for Aumake and Premier Investments
-0.53 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Aumake and Premier is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Aumake and Premier Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Premier Investments and Aumake 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 Aumake are associated (or correlated) with Premier Investments. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Premier Investments has no effect on the direction of Aumake i.e., Aumake and Premier Investments go up and down completely randomly.
Pair Corralation between Aumake and Premier Investments
Assuming the 90 days trading horizon Aumake is expected to generate 5.71 times more return on investment than Premier Investments. However, Aumake is 5.71 times more volatile than Premier Investments. It trades about 0.03 of its potential returns per unit of risk. Premier Investments is currently generating about 0.0 per unit of risk. If you would invest 0.60 in Aumake on September 2, 2024 and sell it today you would lose (0.10) from holding Aumake or give up 16.67% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aumake vs. Premier Investments
Performance |
| Timeline |
| Aumake |
| Premier Investments |
Aumake and Premier Investments Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aumake and Premier Investments
The main advantage of trading using opposite Aumake and Premier Investments positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aumake position performs unexpectedly, Premier Investments 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 Premier Investments will offset losses from the drop in Premier Investments' long position.| Aumake vs. Perseus Mining | Aumake vs. MFF Capital Investments | Aumake vs. Lendlease Group | Aumake vs. Clime Investment Management |
| Premier Investments vs. Aneka Tambang Tbk | Premier Investments vs. BHP Group Limited | Premier Investments vs. Rio Tinto | Premier Investments vs. Macquarie Group Ltd |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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