Correlation Between Aurelia Metals and Bravada Gold
Can any of the company-specific risk be diversified away by investing in both Aurelia Metals and Bravada Gold 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 Aurelia Metals and Bravada Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aurelia Metals Limited and Bravada Gold, you can compare the effects of market volatilities on Aurelia Metals and Bravada Gold 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 Aurelia Metals with a short position of Bravada Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aurelia Metals and Bravada Gold.
Diversification Opportunities for Aurelia Metals and Bravada Gold
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Aurelia and Bravada is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Aurelia Metals Limited and Bravada Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bravada Gold and Aurelia Metals 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 Aurelia Metals Limited are associated (or correlated) with Bravada Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bravada Gold has no effect on the direction of Aurelia Metals i.e., Aurelia Metals and Bravada Gold go up and down completely randomly.
Pair Corralation between Aurelia Metals and Bravada Gold
Assuming the 90 days horizon Aurelia Metals Limited is expected to generate 0.91 times more return on investment than Bravada Gold. However, Aurelia Metals Limited is 1.1 times less risky than Bravada Gold. It trades about 0.06 of its potential returns per unit of risk. Bravada Gold is currently generating about 0.05 per unit of risk. If you would invest 6.58 in Aurelia Metals Limited on December 11, 2024 and sell it today you would earn a total of 6.42 from holding Aurelia Metals Limited or generate 97.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.4% |
| Values | Daily Returns |
Aurelia Metals Limited vs. Bravada Gold
Performance |
| Timeline |
| Aurelia Metals |
| Bravada Gold |
Aurelia Metals and Bravada Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aurelia Metals and Bravada Gold
The main advantage of trading using opposite Aurelia Metals and Bravada Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aurelia Metals position performs unexpectedly, Bravada Gold 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 Bravada Gold will offset losses from the drop in Bravada Gold's long position.| Aurelia Metals vs. Champion Bear Resources | ||
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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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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