Correlation Between K2 Asset and Aurelia Metals
Can any of the company-specific risk be diversified away by investing in both K2 Asset 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 K2 Asset and Aurelia Metals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between K2 Asset Management and Aurelia Metals, you can compare the effects of market volatilities on K2 Asset 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 K2 Asset with a short position of Aurelia Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of K2 Asset and Aurelia Metals.
Diversification Opportunities for K2 Asset and Aurelia Metals
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between KAM and Aurelia is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding K2 Asset Management and Aurelia Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aurelia Metals and K2 Asset 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 K2 Asset Management 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 K2 Asset i.e., K2 Asset and Aurelia Metals go up and down completely randomly.
Pair Corralation between K2 Asset and Aurelia Metals
Assuming the 90 days trading horizon K2 Asset is expected to generate 1.94 times less return on investment than Aurelia Metals. In addition to that, K2 Asset is 1.3 times more volatile than Aurelia Metals. It trades about 0.03 of its total potential returns per unit of risk. Aurelia Metals is currently generating about 0.08 per unit of volatility. If you would invest 9.80 in Aurelia Metals on October 18, 2024 and sell it today you would earn a total of 9.20 from holding Aurelia Metals or generate 93.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
K2 Asset Management vs. Aurelia Metals
Performance |
| Timeline |
| K2 Asset Management |
| Aurelia Metals |
K2 Asset and Aurelia Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with K2 Asset and Aurelia Metals
The main advantage of trading using opposite K2 Asset and Aurelia Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if K2 Asset 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.| K2 Asset vs. Perseus Mining | K2 Asset vs. Hutchison Telecommunications | K2 Asset vs. Talisman Mining | K2 Asset vs. Peel Mining |
| Aurelia Metals vs. Qbe Insurance Group | Aurelia Metals vs. Pinnacle Investment Management | Aurelia Metals vs. Super Retail Group | Aurelia Metals vs. Iron Road |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
Other Complementary Tools
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges |