Correlation Between Stelar Metals and Austral Gold
Can any of the company-specific risk be diversified away by investing in both Stelar Metals and Austral Gold 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 Austral Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Stelar Metals and Austral Gold, you can compare the effects of market volatilities on Stelar Metals and Austral Gold 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 Austral Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Stelar Metals and Austral Gold.
Diversification Opportunities for Stelar Metals and Austral Gold
-0.27 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Stelar and Austral is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Stelar Metals and Austral Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Austral Gold 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 Austral Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Austral Gold has no effect on the direction of Stelar Metals i.e., Stelar Metals and Austral Gold go up and down completely randomly.
Pair Corralation between Stelar Metals and Austral Gold
Assuming the 90 days trading horizon Stelar Metals is expected to under-perform the Austral Gold. But the stock apears to be less risky and, when comparing its historical volatility, Stelar Metals is 2.53 times less risky than Austral Gold. The stock trades about -0.28 of its potential returns per unit of risk. The Austral Gold is currently generating about -0.04 of returns per unit of risk over similar time horizon. If you would invest 2.40 in Austral Gold on August 29, 2024 and sell it today you would lose (0.30) from holding Austral Gold or give up 12.5% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Stelar Metals vs. Austral Gold
Performance |
| Timeline |
| Stelar Metals |
| Austral Gold |
Stelar Metals and Austral Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Stelar Metals and Austral Gold
The main advantage of trading using opposite Stelar Metals and Austral Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Stelar Metals position performs unexpectedly, Austral Gold 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 Austral Gold will offset losses from the drop in Austral Gold'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 |
| Austral Gold vs. Aurelia Metals | Austral Gold vs. Stelar Metals | Austral Gold vs. Air New Zealand | Austral Gold vs. Hotel Property Investments |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
Other Complementary Tools
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites |