Correlation Between Santacruz Silv and Aurania Resources
Can any of the company-specific risk be diversified away by investing in both Santacruz Silv and Aurania 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 Santacruz Silv and Aurania Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Santacruz Silv and Aurania Resources, you can compare the effects of market volatilities on Santacruz Silv and Aurania 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 Santacruz Silv with a short position of Aurania Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Santacruz Silv and Aurania Resources.
Diversification Opportunities for Santacruz Silv and Aurania Resources
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Santacruz and Aurania is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Santacruz Silv and Aurania Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aurania Resources and Santacruz Silv 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 Santacruz Silv are associated (or correlated) with Aurania Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aurania Resources has no effect on the direction of Santacruz Silv i.e., Santacruz Silv and Aurania Resources go up and down completely randomly.
Pair Corralation between Santacruz Silv and Aurania Resources
Assuming the 90 days horizon Santacruz Silv is expected to generate 1.58 times less return on investment than Aurania Resources. But when comparing it to its historical volatility, Santacruz Silv is 1.02 times less risky than Aurania Resources. It trades about 0.02 of its potential returns per unit of risk. Aurania Resources is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 45.00 in Aurania Resources on September 3, 2024 and sell it today you would lose (1.00) from holding Aurania Resources or give up 2.22% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Santacruz Silv vs. Aurania Resources
Performance |
| Timeline |
| Santacruz Silv |
| Aurania Resources |
Santacruz Silv and Aurania Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Santacruz Silv and Aurania Resources
The main advantage of trading using opposite Santacruz Silv and Aurania Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Santacruz Silv position performs unexpectedly, Aurania 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 Aurania Resources will offset losses from the drop in Aurania Resources' long position.| Santacruz Silv vs. Defiance Silver Corp | Santacruz Silv vs. Southern Silver Exploration | Santacruz Silv vs. AbraSilver Resource Corp | Santacruz Silv vs. CMC Metals |
| Aurania Resources vs. Enerev5 Metals | Aurania Resources vs. Osisko Metals | Aurania Resources vs. Lion One Metals | Aurania Resources vs. Definity Financial Corp |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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