Correlation Between Cornish Metals and Aurelia Metals
Can any of the company-specific risk be diversified away by investing in both Cornish Metals and Aurelia 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 Cornish Metals and Aurelia Metals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cornish Metals and Aurelia Metals Limited, you can compare the effects of market volatilities on Cornish Metals and Aurelia 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 Cornish Metals with a short position of Aurelia Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cornish Metals and Aurelia Metals.
Diversification Opportunities for Cornish Metals and Aurelia Metals
0.14 | Correlation Coefficient |
Average diversification
The 3 months correlation between Cornish and Aurelia is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Cornish Metals and Aurelia Metals Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aurelia Metals and Cornish Metals 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 Cornish Metals are associated (or correlated) with Aurelia Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aurelia Metals has no effect on the direction of Cornish Metals i.e., Cornish Metals and Aurelia Metals go up and down completely randomly.
Pair Corralation between Cornish Metals and Aurelia Metals
Assuming the 90 days horizon Cornish Metals is expected to generate 1.77 times less return on investment than Aurelia Metals. In addition to that, Cornish Metals is 1.12 times more volatile than Aurelia Metals Limited. It trades about 0.02 of its total potential returns per unit of risk. Aurelia Metals Limited is currently generating about 0.05 per unit of volatility. If you would invest 15.00 in Aurelia Metals Limited on August 29, 2024 and sell it today you would earn a total of 0.00 from holding Aurelia Metals Limited or generate 0.0% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Cornish Metals vs. Aurelia Metals Limited
Performance |
Timeline |
Cornish Metals |
Aurelia Metals |
Cornish Metals and Aurelia Metals Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Cornish Metals and Aurelia Metals
The main advantage of trading using opposite Cornish Metals and Aurelia Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cornish Metals position performs unexpectedly, Aurelia 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 Aurelia Metals will offset losses from the drop in Aurelia Metals' long position.Cornish Metals vs. Filo Mining Corp | Cornish Metals vs. Pan Global Resources | Cornish Metals vs. Alphamin Resources Corp | Cornish Metals vs. Adriatic Metals Plc |
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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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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