Correlation Between Eramet SA and Aston Minerals
Can any of the company-specific risk be diversified away by investing in both Eramet SA and Aston Minerals 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 Eramet SA and Aston Minerals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Eramet SA ADR and Aston Minerals, you can compare the effects of market volatilities on Eramet SA and Aston Minerals 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 Eramet SA with a short position of Aston Minerals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eramet SA and Aston Minerals.
Diversification Opportunities for Eramet SA and Aston Minerals
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Eramet and Aston is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Eramet SA ADR and Aston Minerals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aston Minerals and Eramet SA 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 Eramet SA ADR are associated (or correlated) with Aston Minerals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aston Minerals has no effect on the direction of Eramet SA i.e., Eramet SA and Aston Minerals go up and down completely randomly.
Pair Corralation between Eramet SA and Aston Minerals
If you would invest 0.75 in Aston Minerals on September 4, 2024 and sell it today you would earn a total of 0.00 from holding Aston Minerals or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Eramet SA ADR vs. Aston Minerals
Performance |
| Timeline |
| Eramet SA ADR |
| Aston Minerals |
Eramet SA and Aston Minerals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eramet SA and Aston Minerals
The main advantage of trading using opposite Eramet SA and Aston Minerals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eramet SA position performs unexpectedly, Aston Minerals 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 Aston Minerals will offset losses from the drop in Aston Minerals' long position.| Eramet SA vs. Qubec Nickel Corp | Eramet SA vs. IGO Limited | Eramet SA vs. Avarone Metals | Eramet SA vs. Adriatic Metals PLC |
| Aston Minerals vs. Thunderstruck Resources | Aston Minerals vs. Tarku Resources | Aston Minerals vs. Eminent Gold Corp | Aston Minerals vs. Murchison Minerals |
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 Anywhere module to track or share privately all of your investments from the convenience of any device.
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