Correlation Between Eagle Mountain and Aurelia Metals
Can any of the company-specific risk be diversified away by investing in both Eagle Mountain 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 Eagle Mountain and Aurelia Metals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Eagle Mountain Mining and Aurelia Metals, you can compare the effects of market volatilities on Eagle Mountain 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 Eagle Mountain with a short position of Aurelia Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eagle Mountain and Aurelia Metals.
Diversification Opportunities for Eagle Mountain and Aurelia Metals
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Eagle and Aurelia is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Eagle Mountain Mining and Aurelia Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aurelia Metals and Eagle Mountain 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 Eagle Mountain Mining 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 Eagle Mountain i.e., Eagle Mountain and Aurelia Metals go up and down completely randomly.
Pair Corralation between Eagle Mountain and Aurelia Metals
Assuming the 90 days trading horizon Eagle Mountain Mining is expected to under-perform the Aurelia Metals. In addition to that, Eagle Mountain is 1.0 times more volatile than Aurelia Metals. It trades about -0.03 of its total potential returns per unit of risk. Aurelia Metals is currently generating about 0.03 per unit of volatility. If you would invest 14.00 in Aurelia Metals on August 24, 2024 and sell it today you would earn a total of 3.00 from holding Aurelia Metals or generate 21.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Eagle Mountain Mining vs. Aurelia Metals
Performance |
| Timeline |
| Eagle Mountain Mining |
| Aurelia Metals |
Eagle Mountain and Aurelia Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eagle Mountain and Aurelia Metals
The main advantage of trading using opposite Eagle Mountain and Aurelia Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eagle Mountain 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.| Eagle Mountain vs. Northern Star Resources | Eagle Mountain vs. Evolution Mining | Eagle Mountain vs. Bluescope Steel | Eagle Mountain vs. Aneka Tambang Tbk |
| Aurelia Metals vs. Computershare | Aurelia Metals vs. Richmond Vanadium Technology | Aurelia Metals vs. Ras Technology Holdings | Aurelia Metals vs. Eagle Mountain 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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