Correlation Between Aura Minerals and International Metals
Can any of the company-specific risk be diversified away by investing in both Aura Minerals and International Metals 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 International Metals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aura Minerals and International Metals Mining, you can compare the effects of market volatilities on Aura Minerals and International Metals 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 International Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aura Minerals and International Metals.
Diversification Opportunities for Aura Minerals and International Metals
-0.63 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Aura and International is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding Aura Minerals and International Metals Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on International Metals 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 International Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of International Metals has no effect on the direction of Aura Minerals i.e., Aura Minerals and International Metals go up and down completely randomly.
Pair Corralation between Aura Minerals and International Metals
Assuming the 90 days trading horizon Aura Minerals is expected to generate 0.55 times more return on investment than International Metals. However, Aura Minerals is 1.83 times less risky than International Metals. It trades about 0.01 of its potential returns per unit of risk. International Metals Mining is currently generating about -0.11 per unit of risk. If you would invest 1,735 in Aura Minerals on September 24, 2024 and sell it today you would lose (4.00) from holding Aura Minerals or give up 0.23% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aura Minerals vs. International Metals Mining
Performance |
| Timeline |
| Aura Minerals |
| International Metals |
Aura Minerals and International Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aura Minerals and International Metals
The main advantage of trading using opposite Aura Minerals and International Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aura Minerals position performs unexpectedly, International Metals 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 International Metals will offset losses from the drop in International Metals' long position.| Aura Minerals vs. Wildsky Resources | Aura Minerals vs. Q Gold Resources | Aura Minerals vs. Plato Gold Corp | Aura Minerals vs. MAS Gold Corp |
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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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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