Correlation Between BTU Metals and Aurion Resources
Can any of the company-specific risk be diversified away by investing in both BTU Metals 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 BTU Metals and Aurion Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BTU Metals Corp and Aurion Resources, you can compare the effects of market volatilities on BTU Metals 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 BTU Metals with a short position of Aurion Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of BTU Metals and Aurion Resources.
Diversification Opportunities for BTU Metals and Aurion Resources
-0.6 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between BTU and Aurion is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding BTU Metals Corp and Aurion Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aurion Resources and BTU Metals 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 BTU Metals Corp 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 BTU Metals i.e., BTU Metals and Aurion Resources go up and down completely randomly.
Pair Corralation between BTU Metals and Aurion Resources
Assuming the 90 days horizon BTU Metals Corp is expected to generate 0.39 times more return on investment than Aurion Resources. However, BTU Metals Corp is 2.54 times less risky than Aurion Resources. It trades about 0.21 of its potential returns per unit of risk. Aurion Resources is currently generating about -0.19 per unit of risk. If you would invest 1.91 in BTU Metals Corp on August 29, 2024 and sell it today you would earn a total of 0.14 from holding BTU Metals Corp or generate 7.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
BTU Metals Corp vs. Aurion Resources
Performance |
| Timeline |
| BTU Metals Corp |
| Aurion Resources |
BTU Metals and Aurion Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BTU Metals and Aurion Resources
The main advantage of trading using opposite BTU Metals and Aurion Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BTU Metals 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.| BTU Metals vs. Aurion Resources | BTU Metals vs. Liberty Gold Corp | BTU Metals vs. Orezone Gold Corp | BTU Metals vs. Fortuna Silver Mines |
| Aurion Resources vs. Minnova Corp | Aurion Resources vs. Argo Gold | Aurion Resources vs. Advance Gold Corp | Aurion Resources vs. Blue Star Gold |
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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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