Correlation Between Infinico Metals and Aura Minerals

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

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

Diversification Opportunities for Infinico Metals and Aura Minerals

-0.61

Correlation Coefficient

Infinico Metals  Aura Minerals

Excellent diversification

The 3 months correlation between Infinico and Aura is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Infinico Metals Corp and Aura Minerals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aura Minerals and Infinico 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 Infinico Metals Corp are associated (or correlated) with Aura Minerals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aura Minerals has no effect on the direction of Infinico Metals i.e., Infinico Metals and Aura Minerals go up and down completely randomly.

Pair Corralation between Infinico Metals and Aura Minerals

Assuming the 90 days trading horizon Infinico Metals Corp is expected to generate 3.54 times more return on investment than Aura Minerals. However, Infinico Metals is 3.54 times more volatile than Aura Minerals. It trades about 0.04 of its potential returns per unit of risk. Aura Minerals is currently generating about 0.08 per unit of risk. If you would invest  4.00  in Infinico Metals Corp on September 2, 2024 and sell it today you would lose (1.50) from holding Infinico Metals Corp or give up 37.5% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	81.65%
Values	Daily Returns

Infinico Metals Corp  vs.  Aura Minerals

Infinico Metals Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Infinico Metals Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable technical and fundamental indicators, Infinico Metals is not utilizing all of its potentials. The recent stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Aura Minerals

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Aura Minerals are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of very weak basic indicators, Aura Minerals displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Infinico Metals and Aura Minerals

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

The idea behind Infinico Metals Corp and Aura Minerals 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.