Correlation Between Skycity Entertainment and Aurum Resources
Can any of the company-specific risk be diversified away by investing in both Skycity Entertainment and Aurum 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 Skycity Entertainment and Aurum Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Skycity Entertainment Group and Aurum Resources, you can compare the effects of market volatilities on Skycity Entertainment and Aurum 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 Skycity Entertainment with a short position of Aurum Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Skycity Entertainment and Aurum Resources.
Diversification Opportunities for Skycity Entertainment and Aurum Resources
-0.51 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Skycity and Aurum is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Skycity Entertainment Group and Aurum Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aurum Resources and Skycity Entertainment 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 Skycity Entertainment Group are associated (or correlated) with Aurum Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aurum Resources has no effect on the direction of Skycity Entertainment i.e., Skycity Entertainment and Aurum Resources go up and down completely randomly.
Pair Corralation between Skycity Entertainment and Aurum Resources
Assuming the 90 days trading horizon Skycity Entertainment Group is expected to under-perform the Aurum Resources. But the stock apears to be less risky and, when comparing its historical volatility, Skycity Entertainment Group is 2.44 times less risky than Aurum Resources. The stock trades about -0.03 of its potential returns per unit of risk. The Aurum Resources is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 10.00 in Aurum Resources on August 29, 2024 and sell it today you would earn a total of 29.00 from holding Aurum Resources or generate 290.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Skycity Entertainment Group vs. Aurum Resources
Performance |
| Timeline |
| Skycity Entertainment |
| Aurum Resources |
Skycity Entertainment and Aurum Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Skycity Entertainment and Aurum Resources
The main advantage of trading using opposite Skycity Entertainment and Aurum Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Skycity Entertainment position performs unexpectedly, Aurum 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 Aurum Resources will offset losses from the drop in Aurum Resources' long position.| Skycity Entertainment vs. Summit Resources Limited | Skycity Entertainment vs. Champion Iron | Skycity Entertainment vs. Ridley | Skycity Entertainment vs. Peel Mining |
| Aurum Resources vs. Apiam Animal Health | Aurum Resources vs. Oceania Healthcare | Aurum Resources vs. AiMedia Technologies | Aurum Resources vs. Hutchison Telecommunications |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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