Correlation Between Klckner Co and Aurania Resources
Can any of the company-specific risk be diversified away by investing in both Klckner Co 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 Klckner Co and Aurania Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Klckner Co SE and Aurania Resources, you can compare the effects of market volatilities on Klckner Co 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 Klckner Co with a short position of Aurania Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Klckner Co and Aurania Resources.
Diversification Opportunities for Klckner Co and Aurania Resources
-0.01 | Correlation Coefficient |
Good diversification
The 3 months correlation between Klckner and Aurania is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Klckner Co SE and Aurania Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aurania Resources and Klckner Co 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 Klckner Co SE 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 Klckner Co i.e., Klckner Co and Aurania Resources go up and down completely randomly.
Pair Corralation between Klckner Co and Aurania Resources
Assuming the 90 days horizon Klckner Co SE is expected to under-perform the Aurania Resources. But the pink sheet apears to be less risky and, when comparing its historical volatility, Klckner Co SE is 2.28 times less risky than Aurania Resources. The pink sheet trades about -0.04 of its potential returns per unit of risk. The Aurania Resources is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 16.00 in Aurania Resources on August 25, 2024 and sell it today you would earn a total of 18.00 from holding Aurania Resources or generate 112.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 88.42% |
| Values | Daily Returns |
Klckner Co SE vs. Aurania Resources
Performance |
| Timeline |
| Klckner Co SE |
| Aurania Resources |
Klckner Co and Aurania Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Klckner Co and Aurania Resources
The main advantage of trading using opposite Klckner Co and Aurania Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Klckner Co 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.| Klckner Co vs. Olympic Steel | Klckner Co vs. Mesabi Trust | Klckner Co vs. Universal Stainless Alloy | Klckner Co vs. POSCO Holdings |
| Aurania Resources vs. Morningstar Unconstrained Allocation | Aurania Resources vs. High Yield Municipal Fund | Aurania Resources vs. Knife River | Aurania Resources vs. Klckner Co SE |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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