Correlation Between Financial and Aurania Resources
Can any of the company-specific risk be diversified away by investing in both Financial 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 Financial and Aurania Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Financial 15 Split and Aurania Resources, you can compare the effects of market volatilities on Financial 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 Financial with a short position of Aurania Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Financial and Aurania Resources.
Diversification Opportunities for Financial and Aurania Resources
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Financial and Aurania is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Financial 15 Split and Aurania Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aurania Resources and Financial 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 Financial 15 Split 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 Financial i.e., Financial and Aurania Resources go up and down completely randomly.
Pair Corralation between Financial and Aurania Resources
Assuming the 90 days trading horizon Financial 15 Split is expected to generate 0.09 times more return on investment than Aurania Resources. However, Financial 15 Split is 10.71 times less risky than Aurania Resources. It trades about 0.1 of its potential returns per unit of risk. Aurania Resources is currently generating about -0.32 per unit of risk. If you would invest 1,047 in Financial 15 Split on September 12, 2024 and sell it today you would earn a total of 8.00 from holding Financial 15 Split or generate 0.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Financial 15 Split vs. Aurania Resources
Performance |
| Timeline |
| Financial 15 Split |
| Aurania Resources |
Financial and Aurania Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Financial and Aurania Resources
The main advantage of trading using opposite Financial and Aurania Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Financial 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.| Financial vs. GOLDMAN SACHS CDR | Financial vs. Galaxy Digital Holdings | Financial vs. Hut 8 Mining | Financial vs. Bitfarms |
| Aurania Resources vs. Advent Wireless | Aurania Resources vs. Data Communications Management | Aurania Resources vs. North American Construction | Aurania Resources vs. Bird Construction |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
Other Complementary Tools
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Bonds Directory Find actively traded corporate debentures issued by US companies |