Correlation Between Conquest Resources and Aurelia Metals
Can any of the company-specific risk be diversified away by investing in both Conquest 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 Conquest 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 Conquest Resources Limited and Aurelia Metals Limited, you can compare the effects of market volatilities on Conquest 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 Conquest Resources with a short position of Aurelia Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Conquest Resources and Aurelia Metals.
Diversification Opportunities for Conquest Resources and Aurelia Metals
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Conquest and Aurelia is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Conquest Resources Limited and Aurelia Metals Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aurelia Metals and Conquest 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 Conquest Resources Limited 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 Conquest Resources i.e., Conquest Resources and Aurelia Metals go up and down completely randomly.
Pair Corralation between Conquest Resources and Aurelia Metals
Assuming the 90 days horizon Conquest Resources is expected to generate 3.26 times less return on investment than Aurelia Metals. But when comparing it to its historical volatility, Conquest Resources Limited is 1.9 times less risky than Aurelia Metals. It trades about 0.04 of its potential returns per unit of risk. Aurelia Metals Limited is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 9.00 in Aurelia Metals Limited on August 26, 2024 and sell it today you would earn a total of 6.00 from holding Aurelia Metals Limited or generate 66.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Conquest Resources Limited vs. Aurelia Metals Limited
Performance |
| Timeline |
| Conquest Resources |
| Aurelia Metals |
Conquest Resources and Aurelia Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Conquest Resources and Aurelia Metals
The main advantage of trading using opposite Conquest Resources and Aurelia Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Conquest 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.| Conquest Resources vs. Ascendant Resources | Conquest Resources vs. Cantex Mine Development | Conquest Resources vs. Amarc Resources | Conquest Resources vs. Sterling Metals Corp |
| Aurelia Metals vs. Champion Bear Resources | Aurelia Metals vs. Baroyeca Gold Silver | Aurelia Metals vs. Centaurus Metals Limited | Aurelia Metals vs. Edison Cobalt 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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