Correlation Between Resolute Mining and Aurion Resources
Can any of the company-specific risk be diversified away by investing in both Resolute Mining and Aurion 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 Resolute Mining and Aurion Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Resolute Mining Limited and Aurion Resources, you can compare the effects of market volatilities on Resolute Mining and Aurion 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 Resolute Mining with a short position of Aurion Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Resolute Mining and Aurion Resources.
Diversification Opportunities for Resolute Mining and Aurion Resources
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Resolute and Aurion is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Resolute Mining Limited and Aurion Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aurion Resources and Resolute Mining 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 Resolute Mining Limited are associated (or correlated) with Aurion Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aurion Resources has no effect on the direction of Resolute Mining i.e., Resolute Mining and Aurion Resources go up and down completely randomly.
Pair Corralation between Resolute Mining and Aurion Resources
Assuming the 90 days horizon Resolute Mining Limited is expected to under-perform the Aurion Resources. In addition to that, Resolute Mining is 2.78 times more volatile than Aurion Resources. It trades about -0.26 of its total potential returns per unit of risk. Aurion Resources is currently generating about -0.23 per unit of volatility. If you would invest 49.00 in Aurion Resources on August 25, 2024 and sell it today you would lose (9.00) from holding Aurion Resources or give up 18.37% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Resolute Mining Limited vs. Aurion Resources
Performance |
| Timeline |
| Resolute Mining |
| Aurion Resources |
Resolute Mining and Aurion Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Resolute Mining and Aurion Resources
The main advantage of trading using opposite Resolute Mining and Aurion Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Resolute Mining position performs unexpectedly, Aurion 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 Aurion Resources will offset losses from the drop in Aurion Resources' long position.| Resolute Mining vs. Aurion Resources | Resolute Mining vs. Minera Alamos | Resolute Mining vs. Rio2 Limited | Resolute Mining vs. Roscan Gold Corp |
| Aurion Resources vs. Minnova Corp | Aurion Resources vs. Argo Gold | Aurion Resources vs. Advance Gold Corp | Aurion Resources vs. Blue Star Gold |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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