Correlation Between Global Li-Ion and Aurelia Metals
Can any of the company-specific risk be diversified away by investing in both Global Li-Ion 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 Global Li-Ion and Aurelia Metals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Global Li Ion Graphite and Aurelia Metals Limited, you can compare the effects of market volatilities on Global Li-Ion 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 Global Li-Ion with a short position of Aurelia Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global Li-Ion and Aurelia Metals.
Diversification Opportunities for Global Li-Ion and Aurelia Metals
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Global and Aurelia is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Global Li Ion Graphite and Aurelia Metals Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aurelia Metals and Global Li-Ion 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 Global Li Ion Graphite 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 Global Li-Ion i.e., Global Li-Ion and Aurelia Metals go up and down completely randomly.
Pair Corralation between Global Li-Ion and Aurelia Metals
Assuming the 90 days horizon Global Li Ion Graphite is expected to generate 2.1 times more return on investment than Aurelia Metals. However, Global Li-Ion is 2.1 times more volatile than Aurelia Metals Limited. It trades about 0.08 of its potential returns per unit of risk. Aurelia Metals Limited is currently generating about 0.1 per unit of risk. If you would invest 1.82 in Global Li Ion Graphite on August 25, 2024 and sell it today you would lose (0.78) from holding Global Li Ion Graphite or give up 42.86% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Global Li Ion Graphite vs. Aurelia Metals Limited
Performance |
| Timeline |
| Global Li Ion |
| Aurelia Metals |
Global Li-Ion and Aurelia Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Global Li-Ion and Aurelia Metals
The main advantage of trading using opposite Global Li-Ion and Aurelia Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global Li-Ion 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.| Global Li-Ion vs. Norra Metals Corp | Global Li-Ion vs. ZincX Resources Corp | Global Li-Ion vs. Nuinsco Resources Limited | Global Li-Ion vs. South Star Battery |
| Aurelia Metals vs. Champion Bear Resources | Aurelia Metals vs. Baroyeca Gold Silver | Aurelia Metals vs. Centaurus Metals Limited | Aurelia Metals vs. Edison Cobalt Corp |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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