Correlation Between Gold Bull and Aurion Resources

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Can any of the company-specific risk be diversified away by investing in both Gold Bull and Aurion 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 Gold Bull and Aurion Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gold Bull Resources and Aurion Resources, you can compare the effects of market volatilities on Gold Bull and Aurion 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 Gold Bull with a short position of Aurion Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gold Bull and Aurion Resources.

Diversification Opportunities for Gold Bull and Aurion Resources

0.5
  Correlation Coefficient

Very weak diversification

The 3 months correlation between Gold and Aurion is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Gold Bull Resources and Aurion Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aurion Resources and Gold Bull 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 Gold Bull Resources are associated (or correlated) with Aurion Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aurion Resources has no effect on the direction of Gold Bull i.e., Gold Bull and Aurion Resources go up and down completely randomly.

Pair Corralation between Gold Bull and Aurion Resources

Assuming the 90 days horizon Gold Bull is expected to generate 1.38 times less return on investment than Aurion Resources. In addition to that, Gold Bull is 1.95 times more volatile than Aurion Resources. It trades about 0.02 of its total potential returns per unit of risk. Aurion Resources is currently generating about 0.05 per unit of volatility. If you would invest  39.00  in Aurion Resources on August 29, 2024 and sell it today you would earn a total of  3.00  from holding Aurion Resources or generate 7.69% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

Gold Bull Resources  vs.  Aurion Resources

 Performance 
       Timeline  
Gold Bull Resources 

Risk-Adjusted Performance

1 of 100

 
Weak
 
Strong
Weak
Compared to the overall equity markets, risk-adjusted returns on investments in Gold Bull Resources are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak fundamental indicators, Gold Bull may actually be approaching a critical reversion point that can send shares even higher in December 2024.
Aurion Resources 

Risk-Adjusted Performance

4 of 100

 
Weak
 
Strong
Insignificant
Compared to the overall equity markets, risk-adjusted returns on investments in Aurion Resources are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak basic indicators, Aurion Resources may actually be approaching a critical reversion point that can send shares even higher in December 2024.

Gold Bull and Aurion Resources Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Gold Bull and Aurion Resources

The main advantage of trading using opposite Gold Bull and Aurion Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gold Bull position performs unexpectedly, Aurion 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 Aurion Resources will offset losses from the drop in Aurion Resources' long position.
The idea behind Gold Bull Resources and Aurion Resources pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.

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