Correlation Between Kermode Resources and Aurion Resources
Can any of the company-specific risk be diversified away by investing in both Kermode Resources 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 Kermode Resources and Aurion Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kermode Resources and Aurion Resources, you can compare the effects of market volatilities on Kermode Resources 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 Kermode Resources with a short position of Aurion Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kermode Resources and Aurion Resources.
Diversification Opportunities for Kermode Resources and Aurion Resources
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Kermode and Aurion is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Kermode Resources and Aurion Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aurion Resources and Kermode Resources 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 Kermode 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 Kermode Resources i.e., Kermode Resources and Aurion Resources go up and down completely randomly.
Pair Corralation between Kermode Resources and Aurion Resources
Assuming the 90 days horizon Kermode Resources is expected to under-perform the Aurion Resources. In addition to that, Kermode Resources is 1.36 times more volatile than Aurion Resources. It trades about -0.21 of its total potential returns per unit of risk. Aurion Resources is currently generating about -0.13 per unit of volatility. If you would invest 49.00 in Aurion Resources on September 2, 2024 and sell it today you would lose (6.00) from holding Aurion Resources or give up 12.24% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.45% |
| Values | Daily Returns |
Kermode Resources vs. Aurion Resources
Performance |
| Timeline |
| Kermode Resources |
| Aurion Resources |
Kermode Resources and Aurion Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kermode Resources and Aurion Resources
The main advantage of trading using opposite Kermode Resources and Aurion Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kermode Resources 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.| Kermode Resources vs. Aurion Resources | Kermode Resources vs. Orezone Gold Corp | Kermode Resources vs. Rio2 Limited | Kermode Resources vs. Norsemont Mining |
| Aurion Resources vs. South32 Limited | Aurion Resources vs. NioCorp Developments Ltd | Aurion Resources vs. HUMANA INC | Aurion Resources vs. SCOR PK |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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