Correlation Between Aura Minerals and Minco Silver
Can any of the company-specific risk be diversified away by investing in both Aura Minerals and Minco Silver 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 Minco Silver into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aura Minerals and Minco Silver, you can compare the effects of market volatilities on Aura Minerals and Minco Silver 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 Minco Silver. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aura Minerals and Minco Silver.
Diversification Opportunities for Aura Minerals and Minco Silver
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Aura and Minco is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Aura Minerals and Minco Silver in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Minco Silver 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 Minco Silver. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Minco Silver has no effect on the direction of Aura Minerals i.e., Aura Minerals and Minco Silver go up and down completely randomly.
Pair Corralation between Aura Minerals and Minco Silver
Assuming the 90 days trading horizon Aura Minerals is expected to generate 0.59 times more return on investment than Minco Silver. However, Aura Minerals is 1.69 times less risky than Minco Silver. It trades about 0.21 of its potential returns per unit of risk. Minco Silver is currently generating about 0.06 per unit of risk. If you would invest 1,258 in Aura Minerals on August 29, 2024 and sell it today you would earn a total of 480.00 from holding Aura Minerals or generate 38.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aura Minerals vs. Minco Silver
Performance |
| Timeline |
| Aura Minerals |
| Minco Silver |
Aura Minerals and Minco Silver Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aura Minerals and Minco Silver
The main advantage of trading using opposite Aura Minerals and Minco Silver positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aura Minerals position performs unexpectedly, Minco Silver 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 Minco Silver will offset losses from the drop in Minco Silver's long position.| Aura Minerals vs. Entree Resources | Aura Minerals vs. Wesdome Gold Mines | Aura Minerals vs. Eastern Platinum Limited | Aura Minerals vs. Platinum Group Metals |
| Minco Silver vs. Excellon Resources | Minco Silver vs. IMPACT Silver Corp | Minco Silver vs. Almaden Minerals | Minco Silver vs. Bear Creek Mining |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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