Correlation Between Auxico Resources and Aurania Resources
Can any of the company-specific risk be diversified away by investing in both Auxico Resources and Aurania Resources 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 Auxico Resources and Aurania Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Auxico Resources Canada and Aurania Resources, you can compare the effects of market volatilities on Auxico Resources and Aurania Resources 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 Auxico Resources with a short position of Aurania Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Auxico Resources and Aurania Resources.
Diversification Opportunities for Auxico Resources and Aurania Resources
0.14 | Correlation Coefficient |
Average diversification
The 3 months correlation between Auxico and Aurania is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Auxico Resources Canada and Aurania Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aurania Resources and Auxico Resources 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 Auxico Resources Canada are associated (or correlated) with Aurania Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aurania Resources has no effect on the direction of Auxico Resources i.e., Auxico Resources and Aurania Resources go up and down completely randomly.
Pair Corralation between Auxico Resources and Aurania Resources
Assuming the 90 days horizon Auxico Resources Canada is expected to generate 19.74 times more return on investment than Aurania Resources. However, Auxico Resources is 19.74 times more volatile than Aurania Resources. It trades about 0.13 of its potential returns per unit of risk. Aurania Resources is currently generating about -0.17 per unit of risk. If you would invest 2.40 in Auxico Resources Canada on August 25, 2024 and sell it today you would lose (1.80) from holding Auxico Resources Canada or give up 75.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Auxico Resources Canada vs. Aurania Resources
Performance |
| Timeline |
| Auxico Resources Canada |
| Aurania Resources |
Auxico Resources and Aurania Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Auxico Resources and Aurania Resources
The main advantage of trading using opposite Auxico Resources and Aurania Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Auxico Resources position performs unexpectedly, Aurania Resources 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 Aurania Resources will offset losses from the drop in Aurania Resources' long position.| Auxico Resources vs. Cartier Iron Corp | Auxico Resources vs. Arctic Star Exploration | Auxico Resources vs. Capella Minerals Limited | Auxico Resources vs. Denarius Silver Corp |
| Aurania Resources vs. Morningstar Unconstrained Allocation | Aurania Resources vs. High Yield Municipal Fund | Aurania Resources vs. Knife River | Aurania Resources vs. Klckner Co SE |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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