Correlation Between Aurelia Metals and Finexia Financial
Can any of the company-specific risk be diversified away by investing in both Aurelia Metals and Finexia Financial 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 Aurelia Metals and Finexia Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aurelia Metals and Finexia Financial Group, you can compare the effects of market volatilities on Aurelia Metals and Finexia Financial 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 Aurelia Metals with a short position of Finexia Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aurelia Metals and Finexia Financial.
Diversification Opportunities for Aurelia Metals and Finexia Financial
-0.29 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Aurelia and Finexia is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Aurelia Metals and Finexia Financial Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Finexia Financial and Aurelia 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 Aurelia Metals are associated (or correlated) with Finexia Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Finexia Financial has no effect on the direction of Aurelia Metals i.e., Aurelia Metals and Finexia Financial go up and down completely randomly.
Pair Corralation between Aurelia Metals and Finexia Financial
Assuming the 90 days trading horizon Aurelia Metals is expected to generate 1.3 times more return on investment than Finexia Financial. However, Aurelia Metals is 1.3 times more volatile than Finexia Financial Group. It trades about 0.02 of its potential returns per unit of risk. Finexia Financial Group is currently generating about -0.02 per unit of risk. If you would invest 17.00 in Aurelia Metals on September 23, 2024 and sell it today you would earn a total of 0.00 from holding Aurelia Metals or generate 0.0% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Aurelia Metals vs. Finexia Financial Group
Performance |
Timeline |
Aurelia Metals |
Finexia Financial |
Aurelia Metals and Finexia Financial Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Aurelia Metals and Finexia Financial
The main advantage of trading using opposite Aurelia Metals and Finexia Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aurelia Metals position performs unexpectedly, Finexia Financial 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 Finexia Financial will offset losses from the drop in Finexia Financial's long position.Aurelia Metals vs. Northern Star Resources | Aurelia Metals vs. Evolution Mining | Aurelia Metals vs. Bluescope Steel | Aurelia Metals vs. Aneka Tambang Tbk |
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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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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