Correlation Between Aurelia Metals and Vale SA
Can any of the company-specific risk be diversified away by investing in both Aurelia Metals and Vale SA 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 Vale SA 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 Vale SA ADR, you can compare the effects of market volatilities on Aurelia Metals and Vale SA 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 Vale SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aurelia Metals and Vale SA.
Diversification Opportunities for Aurelia Metals and Vale SA
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Aurelia and Vale is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Aurelia Metals Limited and Vale SA ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vale SA ADR 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 Vale SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vale SA ADR has no effect on the direction of Aurelia Metals i.e., Aurelia Metals and Vale SA go up and down completely randomly.
Pair Corralation between Aurelia Metals and Vale SA
If you would invest 15.00 in Aurelia Metals Limited on September 1, 2024 and sell it today you would earn a total of 0.00 from holding Aurelia Metals Limited or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Aurelia Metals Limited vs. Vale SA ADR
Performance |
| Timeline |
| Aurelia Metals |
| Vale SA ADR |
Aurelia Metals and Vale SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aurelia Metals and Vale SA
The main advantage of trading using opposite Aurelia Metals and Vale SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aurelia Metals position performs unexpectedly, Vale SA 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 Vale SA will offset losses from the drop in Vale SA'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 |
| Vale SA vs. BHP Group Limited | Vale SA vs. Teck Resources Ltd | Vale SA vs. Lithium Americas Corp | Vale SA vs. MP Materials 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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