Correlation Between Aura Minerals and Lupatech
Can any of the company-specific risk be diversified away by investing in both Aura Minerals and Lupatech 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 Lupatech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aura Minerals and Lupatech SA, you can compare the effects of market volatilities on Aura Minerals and Lupatech 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 Lupatech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aura Minerals and Lupatech.
Diversification Opportunities for Aura Minerals and Lupatech
-0.52 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Aura and Lupatech is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Aura Minerals and Lupatech SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lupatech SA 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 Lupatech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lupatech SA has no effect on the direction of Aura Minerals i.e., Aura Minerals and Lupatech go up and down completely randomly.
Pair Corralation between Aura Minerals and Lupatech
Assuming the 90 days trading horizon Aura Minerals is expected to generate 1.09 times more return on investment than Lupatech. However, Aura Minerals is 1.09 times more volatile than Lupatech SA. It trades about 0.02 of its potential returns per unit of risk. Lupatech SA is currently generating about -0.09 per unit of risk. If you would invest 2,370 in Aura Minerals on August 27, 2024 and sell it today you would earn a total of 10.00 from holding Aura Minerals or generate 0.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aura Minerals vs. Lupatech SA
Performance |
| Timeline |
| Aura Minerals |
| Lupatech SA |
Aura Minerals and Lupatech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aura Minerals and Lupatech
The main advantage of trading using opposite Aura Minerals and Lupatech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aura Minerals position performs unexpectedly, Lupatech 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 Lupatech will offset losses from the drop in Lupatech's long position.| Aura Minerals vs. Ambipar Participaes e | Aura Minerals vs. BrasilAgro Companhia | Aura Minerals vs. Mliuz SA | Aura Minerals vs. Irani Papel e |
| Lupatech vs. Mitsubishi UFJ Financial | Lupatech vs. Sumitomo Mitsui Financial | Lupatech vs. Toyota Motor | Lupatech vs. Banco Santander Chile |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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