Correlation Between Eagle Mountain and Australian United
Can any of the company-specific risk be diversified away by investing in both Eagle Mountain and Australian United 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 Australian United 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 Australian United Investment, you can compare the effects of market volatilities on Eagle Mountain and Australian United 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 Australian United. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eagle Mountain and Australian United.
Diversification Opportunities for Eagle Mountain and Australian United
0.29 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Eagle and Australian is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Eagle Mountain Mining and Australian United Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Australian United 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 Australian United. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Australian United has no effect on the direction of Eagle Mountain i.e., Eagle Mountain and Australian United go up and down completely randomly.
Pair Corralation between Eagle Mountain and Australian United
Assuming the 90 days trading horizon Eagle Mountain Mining is expected to under-perform the Australian United. In addition to that, Eagle Mountain is 7.65 times more volatile than Australian United Investment. It trades about -0.11 of its total potential returns per unit of risk. Australian United Investment is currently generating about 0.05 per unit of volatility. If you would invest 1,022 in Australian United Investment on August 30, 2024 and sell it today you would earn a total of 51.00 from holding Australian United Investment or generate 4.99% 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. Australian United Investment
Performance |
| Timeline |
| Eagle Mountain Mining |
| Australian United |
Eagle Mountain and Australian United Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eagle Mountain and Australian United
The main advantage of trading using opposite Eagle Mountain and Australian United positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eagle Mountain position performs unexpectedly, Australian United 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 Australian United will offset losses from the drop in Australian United's long position.| Eagle Mountain vs. Northern Star Resources | Eagle Mountain vs. Evolution Mining | Eagle Mountain vs. Bluescope Steel | Eagle Mountain vs. Sandfire Resources NL |
| Australian United vs. GQG Partners DRC | Australian United vs. Metrics Master Income | Australian United vs. L1 Long Short | Australian United vs. Wam Leaders |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
Other Complementary Tools
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume |