Correlation Between Benton Resources and Aurelia Metals
Can any of the company-specific risk be diversified away by investing in both Benton Resources and Aurelia Metals 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 Benton Resources and Aurelia Metals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Benton Resources and Aurelia Metals Limited, you can compare the effects of market volatilities on Benton Resources and Aurelia Metals 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 Benton Resources with a short position of Aurelia Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Benton Resources and Aurelia Metals.
Diversification Opportunities for Benton Resources and Aurelia Metals
-0.05 | Correlation Coefficient |
Good diversification
The 3 months correlation between Benton and Aurelia is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding Benton Resources and Aurelia Metals Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aurelia Metals and Benton 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 Benton Resources are associated (or correlated) with Aurelia Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aurelia Metals has no effect on the direction of Benton Resources i.e., Benton Resources and Aurelia Metals go up and down completely randomly.
Pair Corralation between Benton Resources and Aurelia Metals
Assuming the 90 days horizon Benton Resources is expected to generate 2.28 times more return on investment than Aurelia Metals. However, Benton Resources is 2.28 times more volatile than Aurelia Metals Limited. It trades about 0.09 of its potential returns per unit of risk. Aurelia Metals Limited is currently generating about 0.05 per unit of risk. If you would invest 8.00 in Benton Resources on August 29, 2024 and sell it today you would lose (3.00) from holding Benton Resources or give up 37.5% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Benton Resources vs. Aurelia Metals Limited
Performance |
| Timeline |
| Benton Resources |
| Aurelia Metals |
Benton Resources and Aurelia Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Benton Resources and Aurelia Metals
The main advantage of trading using opposite Benton Resources and Aurelia Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Benton Resources position performs unexpectedly, Aurelia Metals 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 Aurelia Metals will offset losses from the drop in Aurelia Metals' long position.| Benton Resources vs. Silver Hammer Mining | Benton Resources vs. Reyna Silver Corp | Benton Resources vs. Guanajuato Silver | Benton Resources vs. Silver One Resources |
| Aurelia Metals vs. Rockridge Resources | Aurelia Metals vs. Ameriwest Lithium | Aurelia Metals vs. Osisko Metals Incorporated | Aurelia Metals vs. Volt Lithium 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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