Correlation Between Sherritt International and Aurelia Metals
Can any of the company-specific risk be diversified away by investing in both Sherritt International 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 Sherritt International and Aurelia Metals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sherritt International and Aurelia Metals Limited, you can compare the effects of market volatilities on Sherritt International 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 Sherritt International with a short position of Aurelia Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sherritt International and Aurelia Metals.
Diversification Opportunities for Sherritt International and Aurelia Metals
-0.08 | Correlation Coefficient |
Good diversification
The 3 months correlation between Sherritt and Aurelia is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Sherritt International and Aurelia Metals Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aurelia Metals and Sherritt International 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 Sherritt International 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 Sherritt International i.e., Sherritt International and Aurelia Metals go up and down completely randomly.
Pair Corralation between Sherritt International and Aurelia Metals
Assuming the 90 days horizon Sherritt International is expected to under-perform the Aurelia Metals. But the pink sheet apears to be less risky and, when comparing its historical volatility, Sherritt International is 1.46 times less risky than Aurelia Metals. The pink sheet trades about -0.01 of its potential returns per unit of risk. The Aurelia Metals Limited is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 10.00 in Aurelia Metals Limited on September 2, 2024 and sell it today you would earn a total of 5.00 from holding Aurelia Metals Limited or generate 50.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.8% |
| Values | Daily Returns |
Sherritt International vs. Aurelia Metals Limited
Performance |
| Timeline |
| Sherritt International |
| Aurelia Metals |
Sherritt International and Aurelia Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sherritt International and Aurelia Metals
The main advantage of trading using opposite Sherritt International and Aurelia Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sherritt International 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.| Sherritt International vs. Metals X Limited | Sherritt International vs. Interra Copper Corp | Sherritt International vs. Anglo American PLC | Sherritt International vs. OM Holdings Limited |
| Aurelia Metals vs. Champion Bear Resources | Aurelia Metals vs. Baroyeca Gold Silver | Aurelia Metals vs. Centaurus Metals Limited | Aurelia Metals vs. Edison Cobalt 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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