Correlation Between Clean Motion and Auriant Mining
Can any of the company-specific risk be diversified away by investing in both Clean Motion and Auriant Mining 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 Clean Motion and Auriant Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Clean Motion AB and Auriant Mining AB, you can compare the effects of market volatilities on Clean Motion and Auriant Mining 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 Clean Motion with a short position of Auriant Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Clean Motion and Auriant Mining.
Diversification Opportunities for Clean Motion and Auriant Mining
0.1 | Correlation Coefficient |
Average diversification
The 3 months correlation between Clean and Auriant is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Clean Motion AB and Auriant Mining AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Auriant Mining AB and Clean Motion 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 Clean Motion AB are associated (or correlated) with Auriant Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Auriant Mining AB has no effect on the direction of Clean Motion i.e., Clean Motion and Auriant Mining go up and down completely randomly.
Pair Corralation between Clean Motion and Auriant Mining
Assuming the 90 days trading horizon Clean Motion AB is expected to under-perform the Auriant Mining. But the stock apears to be less risky and, when comparing its historical volatility, Clean Motion AB is 1.22 times less risky than Auriant Mining. The stock trades about -0.2 of its potential returns per unit of risk. The Auriant Mining AB is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest 100.00 in Auriant Mining AB on November 3, 2024 and sell it today you would earn a total of 20.00 from holding Auriant Mining AB or generate 20.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Clean Motion AB vs. Auriant Mining AB
Performance |
| Timeline |
| Clean Motion AB |
| Auriant Mining AB |
Clean Motion and Auriant Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Clean Motion and Auriant Mining
The main advantage of trading using opposite Clean Motion and Auriant Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Clean Motion position performs unexpectedly, Auriant Mining 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 Auriant Mining will offset losses from the drop in Auriant Mining's long position.| Clean Motion vs. Doxa AB | Clean Motion vs. Cortus Energy AB | Clean Motion vs. Online Brands Nordic | Clean Motion vs. NetJobs Group AB |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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