Correlation Between Knife River and Aurania Resources
Can any of the company-specific risk be diversified away by investing in both Knife River 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 Knife River and Aurania Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Knife River and Aurania Resources, you can compare the effects of market volatilities on Knife River 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 Knife River with a short position of Aurania Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Knife River and Aurania Resources.
Diversification Opportunities for Knife River and Aurania Resources
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Knife and Aurania is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Knife River and Aurania Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aurania Resources and Knife River 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 Knife River 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 Knife River i.e., Knife River and Aurania Resources go up and down completely randomly.
Pair Corralation between Knife River and Aurania Resources
Considering the 90-day investment horizon Knife River is expected to generate 6.05 times less return on investment than Aurania Resources. But when comparing it to its historical volatility, Knife River is 3.47 times less risky than Aurania Resources. It trades about 0.17 of its potential returns per unit of risk. Aurania Resources is currently generating about 0.3 of returns per unit of risk over similar time horizon. If you would invest 25.00 in Aurania Resources on November 11, 2024 and sell it today you would earn a total of 13.00 from holding Aurania Resources or generate 52.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Knife River vs. Aurania Resources
Performance |
| Timeline |
| Knife River |
| Aurania Resources |
Knife River and Aurania Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Knife River and Aurania Resources
The main advantage of trading using opposite Knife River and Aurania Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Knife River 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.| Knife River vs. Flex | Knife River vs. Coda Octopus Group | Knife River vs. Japan Tobacco ADR | Knife River vs. Molson Coors Brewing |
| Aurania Resources vs. KLA Tencor | Aurania Resources vs. Biglari Holdings | Aurania Resources vs. The Cheesecake Factory | Aurania Resources vs. Vishay Intertechnology |
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 CEOs Directory module to screen CEOs from public companies around the world.
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