Correlation Between Metals X and Aldebaran Resources
Can any of the company-specific risk be diversified away by investing in both Metals X and Aldebaran 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 Metals X and Aldebaran Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Metals X Limited and Aldebaran Resources, you can compare the effects of market volatilities on Metals X and Aldebaran 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 Metals X with a short position of Aldebaran Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Metals X and Aldebaran Resources.
Diversification Opportunities for Metals X and Aldebaran Resources
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Metals and Aldebaran is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Metals X Limited and Aldebaran Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aldebaran Resources and Metals X 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 Metals X Limited are associated (or correlated) with Aldebaran Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aldebaran Resources has no effect on the direction of Metals X i.e., Metals X and Aldebaran Resources go up and down completely randomly.
Pair Corralation between Metals X and Aldebaran Resources
Assuming the 90 days horizon Metals X is expected to generate 5.88 times less return on investment than Aldebaran Resources. In addition to that, Metals X is 1.08 times more volatile than Aldebaran Resources. It trades about 0.02 of its total potential returns per unit of risk. Aldebaran Resources is currently generating about 0.1 per unit of volatility. If you would invest 95.00 in Aldebaran Resources on October 26, 2024 and sell it today you would earn a total of 27.00 from holding Aldebaran Resources or generate 28.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 98.33% |
| Values | Daily Returns |
Metals X Limited vs. Aldebaran Resources
Performance |
| Timeline |
| Metals X Limited |
| Aldebaran Resources |
Metals X and Aldebaran Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Metals X and Aldebaran Resources
The main advantage of trading using opposite Metals X and Aldebaran Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Metals X position performs unexpectedly, Aldebaran 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 Aldebaran Resources will offset losses from the drop in Aldebaran Resources' long position.| Metals X vs. Eramet SA ADR | Metals X vs. NGEx Minerals | Metals X vs. Forum Energy Metals | Metals X vs. Adriatic Metals Plc |
| Aldebaran Resources vs. Huntsman Exploration | Aldebaran Resources vs. Aurelia Metals Limited | Aldebaran Resources vs. Adriatic Metals PLC | Aldebaran Resources vs. American Helium |
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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
Other Complementary Tools
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. |