Correlation Between Aura Minerals and Almaden Minerals
Can any of the company-specific risk be diversified away by investing in both Aura Minerals and Almaden Minerals 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 Aura Minerals and Almaden Minerals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aura Minerals and Almaden Minerals, you can compare the effects of market volatilities on Aura Minerals and Almaden Minerals 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 Aura Minerals with a short position of Almaden Minerals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aura Minerals and Almaden Minerals.
Diversification Opportunities for Aura Minerals and Almaden Minerals
0.19 | Correlation Coefficient |
Average diversification
The 3 months correlation between Aura and Almaden is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Aura Minerals and Almaden Minerals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Almaden Minerals and Aura Minerals 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 Aura Minerals are associated (or correlated) with Almaden Minerals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Almaden Minerals has no effect on the direction of Aura Minerals i.e., Aura Minerals and Almaden Minerals go up and down completely randomly.
Pair Corralation between Aura Minerals and Almaden Minerals
Assuming the 90 days trading horizon Aura Minerals is expected to generate 0.34 times more return on investment than Almaden Minerals. However, Aura Minerals is 2.93 times less risky than Almaden Minerals. It trades about 0.05 of its potential returns per unit of risk. Almaden Minerals is currently generating about -0.13 per unit of risk. If you would invest 1,703 in Aura Minerals on August 28, 2024 and sell it today you would earn a total of 35.00 from holding Aura Minerals or generate 2.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aura Minerals vs. Almaden Minerals
Performance |
| Timeline |
| Aura Minerals |
| Almaden Minerals |
Aura Minerals and Almaden Minerals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aura Minerals and Almaden Minerals
The main advantage of trading using opposite Aura Minerals and Almaden Minerals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aura Minerals position performs unexpectedly, Almaden Minerals 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 Almaden Minerals will offset losses from the drop in Almaden Minerals' long position.| Aura Minerals vs. Centamin PLC | Aura Minerals vs. Entree Resources | Aura Minerals vs. Wesdome Gold Mines | Aura Minerals vs. Eastern Platinum Limited |
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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