Correlation Between Stelar Metals and Aeris Environmental
Can any of the company-specific risk be diversified away by investing in both Stelar Metals and Aeris Environmental 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 Stelar Metals and Aeris Environmental into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Stelar Metals and Aeris Environmental, you can compare the effects of market volatilities on Stelar Metals and Aeris Environmental 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 Stelar Metals with a short position of Aeris Environmental. Check out your portfolio center. Please also check ongoing floating volatility patterns of Stelar Metals and Aeris Environmental.
Diversification Opportunities for Stelar Metals and Aeris Environmental
-0.25 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Stelar and Aeris is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding Stelar Metals and Aeris Environmental in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aeris Environmental and Stelar Metals 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 Stelar Metals are associated (or correlated) with Aeris Environmental. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aeris Environmental has no effect on the direction of Stelar Metals i.e., Stelar Metals and Aeris Environmental go up and down completely randomly.
Pair Corralation between Stelar Metals and Aeris Environmental
Assuming the 90 days trading horizon Stelar Metals is expected to generate 0.69 times more return on investment than Aeris Environmental. However, Stelar Metals is 1.44 times less risky than Aeris Environmental. It trades about 0.04 of its potential returns per unit of risk. Aeris Environmental is currently generating about -0.04 per unit of risk. If you would invest 7.00 in Stelar Metals on September 5, 2024 and sell it today you would earn a total of 0.10 from holding Stelar Metals or generate 1.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Stelar Metals vs. Aeris Environmental
Performance |
| Timeline |
| Stelar Metals |
| Aeris Environmental |
Stelar Metals and Aeris Environmental Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Stelar Metals and Aeris Environmental
The main advantage of trading using opposite Stelar Metals and Aeris Environmental positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Stelar Metals position performs unexpectedly, Aeris Environmental 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 Aeris Environmental will offset losses from the drop in Aeris Environmental's long position.| Stelar Metals vs. Northern Star Resources | Stelar Metals vs. Evolution Mining | Stelar Metals vs. Bluescope Steel | Stelar Metals vs. Sandfire Resources NL |
| Aeris Environmental vs. Black Rock Mining | Aeris Environmental vs. IDP Education | Aeris Environmental vs. Carnegie Clean Energy | Aeris Environmental vs. Stelar Metals |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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