Correlation Between Aurubis AG and Southern Copper
Can any of the company-specific risk be diversified away by investing in both Aurubis AG and Southern Copper 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 Aurubis AG and Southern Copper into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aurubis AG and Southern Copper, you can compare the effects of market volatilities on Aurubis AG and Southern Copper 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 Aurubis AG with a short position of Southern Copper. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aurubis AG and Southern Copper.
Diversification Opportunities for Aurubis AG and Southern Copper
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Aurubis and Southern is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Aurubis AG and Southern Copper in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Southern Copper and Aurubis AG 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 Aurubis AG are associated (or correlated) with Southern Copper. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Southern Copper has no effect on the direction of Aurubis AG i.e., Aurubis AG and Southern Copper go up and down completely randomly.
Pair Corralation between Aurubis AG and Southern Copper
Assuming the 90 days trading horizon Aurubis AG is expected to under-perform the Southern Copper. In addition to that, Aurubis AG is 1.87 times more volatile than Southern Copper. It trades about -0.13 of its total potential returns per unit of risk. Southern Copper is currently generating about 0.45 per unit of volatility. If you would invest 8,820 in Southern Copper on October 21, 2024 and sell it today you would earn a total of 634.00 from holding Southern Copper or generate 7.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aurubis AG vs. Southern Copper
Performance |
| Timeline |
| Aurubis AG |
| Southern Copper |
Aurubis AG and Southern Copper Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aurubis AG and Southern Copper
The main advantage of trading using opposite Aurubis AG and Southern Copper positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aurubis AG position performs unexpectedly, Southern Copper 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 Southern Copper will offset losses from the drop in Southern Copper's long position.| Aurubis AG vs. InterContinental Hotels Group | Aurubis AG vs. Transport International Holdings | Aurubis AG vs. DALATA HOTEL | Aurubis AG vs. COLUMBIA SPORTSWEAR |
| Southern Copper vs. Tencent Music Entertainment | Southern Copper vs. Gol Intelligent Airlines | Southern Copper vs. Warner Music Group | Southern Copper vs. Aegean Airlines SA |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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