Correlation Between Cartier Resources and Aurania Resources
Can any of the company-specific risk be diversified away by investing in both Cartier Resources and Aurania 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 Cartier Resources and Aurania Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cartier Resources and Aurania Resources, you can compare the effects of market volatilities on Cartier Resources and Aurania 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 Cartier Resources with a short position of Aurania Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cartier Resources and Aurania Resources.
Diversification Opportunities for Cartier Resources and Aurania Resources
0.1 | Correlation Coefficient |
Average diversification
The 3 months correlation between Cartier and Aurania is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Cartier Resources and Aurania Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aurania Resources and Cartier 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 Cartier Resources are associated (or correlated) with Aurania Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aurania Resources has no effect on the direction of Cartier Resources i.e., Cartier Resources and Aurania Resources go up and down completely randomly.
Pair Corralation between Cartier Resources and Aurania Resources
Assuming the 90 days horizon Cartier Resources is expected to generate 0.98 times more return on investment than Aurania Resources. However, Cartier Resources is 1.02 times less risky than Aurania Resources. It trades about -0.29 of its potential returns per unit of risk. Aurania Resources is currently generating about -0.35 per unit of risk. If you would invest 12.00 in Cartier Resources on August 29, 2024 and sell it today you would lose (3.00) from holding Cartier Resources or give up 25.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cartier Resources vs. Aurania Resources
Performance |
| Timeline |
| Cartier Resources |
| Aurania Resources |
Cartier Resources and Aurania Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cartier Resources and Aurania Resources
The main advantage of trading using opposite Cartier Resources and Aurania Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cartier Resources position performs unexpectedly, Aurania 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 Aurania Resources will offset losses from the drop in Aurania Resources' long position.| Cartier Resources vs. First Majestic Silver | Cartier Resources vs. Ivanhoe Energy | Cartier Resources vs. Orezone Gold Corp | Cartier Resources vs. Faraday Copper Corp |
| Aurania Resources vs. Primaris Retail RE | Aurania Resources vs. Canso Select Opportunities | Aurania Resources vs. Champion Gaming Group | Aurania Resources vs. Perseus Mining |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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