Correlation Between Horizonte Minerals and Aurelia Metals

Can any of the company-specific risk be diversified away by investing in both Horizonte Minerals and Aurelia Metals 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 Horizonte Minerals and Aurelia Metals into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Horizonte Minerals Plc and Aurelia Metals Limited, you can compare the effects of market volatilities on Horizonte Minerals and Aurelia Metals 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 Horizonte Minerals with a short position of Aurelia Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Horizonte Minerals and Aurelia Metals.

Diversification Opportunities for Horizonte Minerals and Aurelia Metals

0.0

Correlation Coefficient

Horizonte Minerals  Aurelia Metals

Pay attention - limited upside

The 3 months correlation between Horizonte and Aurelia is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Horizonte Minerals Plc and Aurelia Metals Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aurelia Metals and Horizonte Minerals 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 Horizonte Minerals Plc are associated (or correlated) with Aurelia Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aurelia Metals has no effect on the direction of Horizonte Minerals i.e., Horizonte Minerals and Aurelia Metals go up and down completely randomly.

Pair Corralation between Horizonte Minerals and Aurelia Metals

If you would invest  0.39  in Horizonte Minerals Plc on September 5, 2024 and sell it today you would earn a total of  0.00  from holding Horizonte Minerals Plc or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Horizonte Minerals Plc  vs.  Aurelia Metals Limited

Horizonte Minerals Plc

Risk-Adjusted Performance

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Very Weak

Over the last 90 days Horizonte Minerals Plc has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable primary indicators, Horizonte Minerals is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Aurelia Metals

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Aurelia Metals Limited has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Horizonte Minerals and Aurelia Metals

The main advantage of trading using opposite Horizonte Minerals and Aurelia Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Horizonte Minerals position performs unexpectedly, Aurelia Metals 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 Aurelia Metals will offset losses from the drop in Aurelia Metals' long position.

The idea behind Horizonte Minerals Plc and Aurelia Metals Limited pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.