Correlation Between BonTerra Resources and Aurion Resources
Can any of the company-specific risk be diversified away by investing in both BonTerra Resources and Aurion 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 BonTerra Resources and Aurion Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BonTerra Resources and Aurion Resources, you can compare the effects of market volatilities on BonTerra Resources and Aurion 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 BonTerra Resources with a short position of Aurion Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of BonTerra Resources and Aurion Resources.
Diversification Opportunities for BonTerra Resources and Aurion Resources
0.19 | Correlation Coefficient |
Average diversification
The 3 months correlation between BonTerra and Aurion is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding BonTerra Resources and Aurion Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aurion Resources and BonTerra 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 BonTerra Resources are associated (or correlated) with Aurion Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aurion Resources has no effect on the direction of BonTerra Resources i.e., BonTerra Resources and Aurion Resources go up and down completely randomly.
Pair Corralation between BonTerra Resources and Aurion Resources
Assuming the 90 days horizon BonTerra Resources is expected to generate 2.35 times more return on investment than Aurion Resources. However, BonTerra Resources is 2.35 times more volatile than Aurion Resources. It trades about 0.02 of its potential returns per unit of risk. Aurion Resources is currently generating about -0.02 per unit of risk. If you would invest 26.00 in BonTerra Resources on August 29, 2024 and sell it today you would lose (1.00) from holding BonTerra Resources or give up 3.85% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
BonTerra Resources vs. Aurion Resources
Performance |
| Timeline |
| BonTerra Resources |
| Aurion Resources |
BonTerra Resources and Aurion Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BonTerra Resources and Aurion Resources
The main advantage of trading using opposite BonTerra Resources and Aurion Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BonTerra Resources position performs unexpectedly, Aurion 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 Aurion Resources will offset losses from the drop in Aurion Resources' long position.| BonTerra Resources vs. Cartier Resources | BonTerra Resources vs. Galway Metals | BonTerra Resources vs. Aurion Resources | BonTerra Resources vs. Minaurum Gold |
| Aurion Resources vs. Galway Metals | Aurion Resources vs. Minaurum Gold | Aurion Resources vs. BonTerra Resources | Aurion Resources vs. Aurania Resources |
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.
Other Complementary Tools
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Global Correlations Find global opportunities by holding instruments from different markets | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation |