Correlation Between Aurelia Metals and European Metals
Can any of the company-specific risk be diversified away by investing in both Aurelia Metals and European Metals 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 European Metals 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 European Metals Holdings, you can compare the effects of market volatilities on Aurelia Metals and European Metals 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 European Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aurelia Metals and European Metals.
Diversification Opportunities for Aurelia Metals and European Metals
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Aurelia and European is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Aurelia Metals Limited and European Metals Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on European Metals Holdings 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 European Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of European Metals Holdings has no effect on the direction of Aurelia Metals i.e., Aurelia Metals and European Metals go up and down completely randomly.
Pair Corralation between Aurelia Metals and European Metals
If you would invest 8.60 in European Metals Holdings on November 3, 2024 and sell it today you would earn a total of 0.70 from holding European Metals Holdings or generate 8.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
Aurelia Metals Limited vs. European Metals Holdings
Performance |
| Timeline |
| Aurelia Metals |
| European Metals Holdings |
Aurelia Metals and European Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aurelia Metals and European Metals
The main advantage of trading using opposite Aurelia Metals and European Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aurelia Metals position performs unexpectedly, European Metals 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 European Metals will offset losses from the drop in European Metals' 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 |
| European Metals vs. Aurelia Metals Limited | European Metals vs. Centaurus Metals Limited | European Metals vs. Artemis Resources | European Metals vs. Ascendant Resources |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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