Correlation Between Sirios Resources and Aurion Resources
Can any of the company-specific risk be diversified away by investing in both Sirios Resources 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 Sirios Resources and Aurion Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sirios Resources and Aurion Resources, you can compare the effects of market volatilities on Sirios Resources 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 Sirios Resources with a short position of Aurion Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sirios Resources and Aurion Resources.
Diversification Opportunities for Sirios Resources and Aurion Resources
0.21 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Sirios and Aurion is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Sirios Resources and Aurion Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aurion Resources and Sirios 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 Sirios Resources 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 Sirios Resources i.e., Sirios Resources and Aurion Resources go up and down completely randomly.
Pair Corralation between Sirios Resources and Aurion Resources
Assuming the 90 days horizon Sirios Resources is expected to generate 2.15 times more return on investment than Aurion Resources. However, Sirios Resources is 2.15 times more volatile than Aurion Resources. It trades about 0.02 of its potential returns per unit of risk. Aurion Resources is currently generating about 0.0 per unit of risk. If you would invest 5.33 in Sirios Resources on August 28, 2024 and sell it today you would lose (1.60) from holding Sirios Resources or give up 30.02% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sirios Resources vs. Aurion Resources
Performance |
| Timeline |
| Sirios Resources |
| Aurion Resources |
Sirios Resources and Aurion Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sirios Resources and Aurion Resources
The main advantage of trading using opposite Sirios Resources and Aurion Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sirios Resources 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.| Sirios Resources vs. Red Pine Exploration | Sirios Resources vs. Precipitate Gold Corp | Sirios Resources vs. Spanish Mountain Gold | Sirios Resources vs. Bravada Gold |
| 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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