Correlation Between Auriant Mining and Rottneros
Can any of the company-specific risk be diversified away by investing in both Auriant Mining and Rottneros 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 Auriant Mining and Rottneros into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Auriant Mining AB and Rottneros AB, you can compare the effects of market volatilities on Auriant Mining and Rottneros 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 Auriant Mining with a short position of Rottneros. Check out your portfolio center. Please also check ongoing floating volatility patterns of Auriant Mining and Rottneros.
Diversification Opportunities for Auriant Mining and Rottneros
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Auriant and Rottneros is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Auriant Mining AB and Rottneros AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rottneros AB and Auriant Mining 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 Auriant Mining AB are associated (or correlated) with Rottneros. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rottneros AB has no effect on the direction of Auriant Mining i.e., Auriant Mining and Rottneros go up and down completely randomly.
Pair Corralation between Auriant Mining and Rottneros
Assuming the 90 days trading horizon Auriant Mining AB is expected to generate 9.04 times more return on investment than Rottneros. However, Auriant Mining is 9.04 times more volatile than Rottneros AB. It trades about 0.06 of its potential returns per unit of risk. Rottneros AB is currently generating about -0.02 per unit of risk. If you would invest 99.00 in Auriant Mining AB on September 4, 2024 and sell it today you would earn a total of 1.00 from holding Auriant Mining AB or generate 1.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.66% |
| Values | Daily Returns |
Auriant Mining AB vs. Rottneros AB
Performance |
| Timeline |
| Auriant Mining AB |
| Rottneros AB |
Auriant Mining and Rottneros Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Auriant Mining and Rottneros
The main advantage of trading using opposite Auriant Mining and Rottneros positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Auriant Mining position performs unexpectedly, Rottneros 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 Rottneros will offset losses from the drop in Rottneros' long position.| Auriant Mining vs. Arctic Gold Publ | Auriant Mining vs. aXichem AB | Auriant Mining vs. Avensia publ AB | Auriant Mining vs. KABE Group AB |
| Rottneros vs. BillerudKorsnas AB | Rottneros vs. SSAB AB | Rottneros vs. Svenska Cellulosa Aktiebolaget | Rottneros vs. Axfood AB |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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