Correlation Between EROAD and Aspire Mining
Can any of the company-specific risk be diversified away by investing in both EROAD and Aspire Mining 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 EROAD and Aspire Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between EROAD and Aspire Mining, you can compare the effects of market volatilities on EROAD and Aspire Mining 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 EROAD with a short position of Aspire Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of EROAD and Aspire Mining.
Diversification Opportunities for EROAD and Aspire Mining
0.02 | Correlation Coefficient |
Significant diversification
The 3 months correlation between EROAD and Aspire is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding EROAD and Aspire Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aspire Mining and EROAD 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 EROAD are associated (or correlated) with Aspire Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aspire Mining has no effect on the direction of EROAD i.e., EROAD and Aspire Mining go up and down completely randomly.
Pair Corralation between EROAD and Aspire Mining
Assuming the 90 days trading horizon EROAD is expected to generate 58.15 times less return on investment than Aspire Mining. But when comparing it to its historical volatility, EROAD is 1.7 times less risky than Aspire Mining. It trades about 0.0 of its potential returns per unit of risk. Aspire Mining is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 22.00 in Aspire Mining on September 1, 2024 and sell it today you would earn a total of 7.00 from holding Aspire Mining or generate 31.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
EROAD vs. Aspire Mining
Performance |
| Timeline |
| EROAD |
| Aspire Mining |
EROAD and Aspire Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with EROAD and Aspire Mining
The main advantage of trading using opposite EROAD and Aspire Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EROAD position performs unexpectedly, Aspire Mining 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 Aspire Mining will offset losses from the drop in Aspire Mining's long position.| EROAD vs. Centuria Industrial Reit | EROAD vs. Sky Metals | EROAD vs. The Environmental Group | EROAD vs. Qbe Insurance Group |
| Aspire Mining vs. Centaurus Metals | Aspire Mining vs. Queste Communications | Aspire Mining vs. Event Hospitality and | Aspire Mining vs. Centuria Industrial Reit |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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