Correlation Between Sandfire Resources and Aeon Metals
Can any of the company-specific risk be diversified away by investing in both Sandfire Resources and Aeon 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 Sandfire Resources and Aeon Metals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sandfire Resources NL and Aeon Metals, you can compare the effects of market volatilities on Sandfire Resources and Aeon 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 Sandfire Resources with a short position of Aeon Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sandfire Resources and Aeon Metals.
Diversification Opportunities for Sandfire Resources and Aeon Metals
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Sandfire and Aeon is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Sandfire Resources NL and Aeon Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aeon Metals and Sandfire Resources 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 Sandfire Resources NL are associated (or correlated) with Aeon Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aeon Metals has no effect on the direction of Sandfire Resources i.e., Sandfire Resources and Aeon Metals go up and down completely randomly.
Pair Corralation between Sandfire Resources and Aeon Metals
Assuming the 90 days trading horizon Sandfire Resources NL is expected to generate 0.25 times more return on investment than Aeon Metals. However, Sandfire Resources NL is 3.94 times less risky than Aeon Metals. It trades about 0.09 of its potential returns per unit of risk. Aeon Metals is currently generating about 0.01 per unit of risk. If you would invest 718.00 in Sandfire Resources NL on August 29, 2024 and sell it today you would earn a total of 299.00 from holding Sandfire Resources NL or generate 41.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 99.53% |
| Values | Daily Returns |
Sandfire Resources NL vs. Aeon Metals
Performance |
| Timeline |
| Sandfire Resources |
| Aeon Metals |
Sandfire Resources and Aeon Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sandfire Resources and Aeon Metals
The main advantage of trading using opposite Sandfire Resources and Aeon Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sandfire Resources position performs unexpectedly, Aeon 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 Aeon Metals will offset losses from the drop in Aeon Metals' long position.| Sandfire Resources vs. Pinnacle Investment Management | Sandfire Resources vs. Bio Gene Technology | Sandfire Resources vs. Macquarie Technology Group | Sandfire Resources vs. Computershare |
| Aeon Metals vs. Northern Star Resources | Aeon Metals vs. Evolution Mining | Aeon Metals vs. Bluescope Steel | Aeon Metals vs. Sandfire Resources NL |
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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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