Correlation Between Aura Minerals and Dexxos Participaes
Can any of the company-specific risk be diversified away by investing in both Aura Minerals and Dexxos Participaes 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 Aura Minerals and Dexxos Participaes into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aura Minerals and Dexxos Participaes SA, you can compare the effects of market volatilities on Aura Minerals and Dexxos Participaes 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 Aura Minerals with a short position of Dexxos Participaes. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aura Minerals and Dexxos Participaes.
Diversification Opportunities for Aura Minerals and Dexxos Participaes
-0.66 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Aura and Dexxos is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding Aura Minerals and Dexxos Participaes SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dexxos Participaes and Aura Minerals 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 Aura Minerals are associated (or correlated) with Dexxos Participaes. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dexxos Participaes has no effect on the direction of Aura Minerals i.e., Aura Minerals and Dexxos Participaes go up and down completely randomly.
Pair Corralation between Aura Minerals and Dexxos Participaes
Assuming the 90 days trading horizon Aura Minerals is expected to generate 1.14 times more return on investment than Dexxos Participaes. However, Aura Minerals is 1.14 times more volatile than Dexxos Participaes SA. It trades about -0.11 of its potential returns per unit of risk. Dexxos Participaes SA is currently generating about -0.17 per unit of risk. If you would invest 2,493 in Aura Minerals on August 31, 2024 and sell it today you would lose (169.00) from holding Aura Minerals or give up 6.78% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aura Minerals vs. Dexxos Participaes SA
Performance |
| Timeline |
| Aura Minerals |
| Dexxos Participaes |
Aura Minerals and Dexxos Participaes Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aura Minerals and Dexxos Participaes
The main advantage of trading using opposite Aura Minerals and Dexxos Participaes positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aura Minerals position performs unexpectedly, Dexxos Participaes 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 Dexxos Participaes will offset losses from the drop in Dexxos Participaes' long position.| Aura Minerals vs. Ambipar Participaes e | Aura Minerals vs. BrasilAgro Companhia | Aura Minerals vs. Mliuz SA | Aura Minerals vs. Irani Papel e |
| Dexxos Participaes vs. Taurus Armas SA | Dexxos Participaes vs. Cia de Ferro | Dexxos Participaes vs. Irani Papel e | Dexxos Participaes vs. Ambipar Participaes e |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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