Correlation Between Critical Elements and Aurelia Metals
Can any of the company-specific risk be diversified away by investing in both Critical Elements 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 Critical Elements and Aurelia Metals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Critical Elements and Aurelia Metals Limited, you can compare the effects of market volatilities on Critical Elements 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 Critical Elements with a short position of Aurelia Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Critical Elements and Aurelia Metals.
Diversification Opportunities for Critical Elements and Aurelia Metals
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Critical and Aurelia is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Critical Elements and Aurelia Metals Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aurelia Metals and Critical Elements 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 Critical Elements 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 Critical Elements i.e., Critical Elements and Aurelia Metals go up and down completely randomly.
Pair Corralation between Critical Elements and Aurelia Metals
Assuming the 90 days horizon Critical Elements is expected to under-perform the Aurelia Metals. In addition to that, Critical Elements is 1.14 times more volatile than Aurelia Metals Limited. It trades about -0.32 of its total potential returns per unit of risk. Aurelia Metals Limited is currently generating about -0.21 per unit of volatility. If you would invest 18.00 in Aurelia Metals Limited on August 29, 2024 and sell it today you would lose (3.00) from holding Aurelia Metals Limited or give up 16.67% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Critical Elements vs. Aurelia Metals Limited
Performance |
| Timeline |
| Critical Elements |
| Aurelia Metals |
Critical Elements and Aurelia Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Critical Elements and Aurelia Metals
The main advantage of trading using opposite Critical Elements and Aurelia Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Critical Elements 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.| Critical Elements vs. Argosy Minerals Limited | Critical Elements vs. Aurelia Metals Limited | Critical Elements vs. Artemis Resources | Critical Elements vs. Ascendant Resources |
| Aurelia Metals vs. Rockridge Resources | Aurelia Metals vs. Vital Metals Limited | Aurelia Metals vs. Ameriwest Lithium | Aurelia Metals vs. Osisko Metals Incorporated |
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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
Other Complementary Tools
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing |