Correlation Between Aurelia Metals and Champion Bear
Can any of the company-specific risk be diversified away by investing in both Aurelia Metals and Champion Bear 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 Champion Bear 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 Champion Bear Resources, you can compare the effects of market volatilities on Aurelia Metals and Champion Bear 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 Champion Bear. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aurelia Metals and Champion Bear.
Diversification Opportunities for Aurelia Metals and Champion Bear
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Aurelia and Champion is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Aurelia Metals Limited and Champion Bear Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Champion Bear Resources 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 Champion Bear. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Champion Bear Resources has no effect on the direction of Aurelia Metals i.e., Aurelia Metals and Champion Bear go up and down completely randomly.
Pair Corralation between Aurelia Metals and Champion Bear
Assuming the 90 days horizon Aurelia Metals Limited is expected to generate 0.5 times more return on investment than Champion Bear. However, Aurelia Metals Limited is 2.0 times less risky than Champion Bear. It trades about -0.22 of its potential returns per unit of risk. Champion Bear Resources is currently generating about -0.22 per unit of risk. If you would invest 18.00 in Aurelia Metals Limited on August 28, 2024 and sell it today you would lose (3.00) from holding Aurelia Metals Limited or give up 16.67% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aurelia Metals Limited vs. Champion Bear Resources
Performance |
| Timeline |
| Aurelia Metals |
| Champion Bear Resources |
Aurelia Metals and Champion Bear Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aurelia Metals and Champion Bear
The main advantage of trading using opposite Aurelia Metals and Champion Bear positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aurelia Metals position performs unexpectedly, Champion Bear 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 Champion Bear will offset losses from the drop in Champion Bear's long position.| Aurelia Metals vs. Champion Bear Resources | Aurelia Metals vs. Baroyeca Gold Silver | Aurelia Metals vs. Centaurus Metals Limited | Aurelia Metals vs. Edison Cobalt Corp |
| Champion Bear vs. Aurelia Metals Limited | Champion Bear vs. Baroyeca Gold Silver | Champion Bear vs. Centaurus Metals Limited | Champion Bear vs. Edison Cobalt 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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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