Correlation Between Sandfire Resources and AURUBIS AG
Can any of the company-specific risk be diversified away by investing in both Sandfire Resources and AURUBIS AG 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 Sandfire Resources and AURUBIS AG into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sandfire Resources Limited and AURUBIS AG UNSPADR, you can compare the effects of market volatilities on Sandfire Resources and AURUBIS AG 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 Sandfire Resources with a short position of AURUBIS AG. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sandfire Resources and AURUBIS AG.
Diversification Opportunities for Sandfire Resources and AURUBIS AG
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Sandfire and AURUBIS is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Sandfire Resources Limited and AURUBIS AG UNSPADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AURUBIS AG UNSPADR and Sandfire Resources 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 Sandfire Resources Limited are associated (or correlated) with AURUBIS AG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AURUBIS AG UNSPADR has no effect on the direction of Sandfire Resources i.e., Sandfire Resources and AURUBIS AG go up and down completely randomly.
Pair Corralation between Sandfire Resources and AURUBIS AG
Assuming the 90 days horizon Sandfire Resources Limited is expected to under-perform the AURUBIS AG. But the stock apears to be less risky and, when comparing its historical volatility, Sandfire Resources Limited is 1.31 times less risky than AURUBIS AG. The stock trades about -0.05 of its potential returns per unit of risk. The AURUBIS AG UNSPADR is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 2,940 in AURUBIS AG UNSPADR on September 24, 2024 and sell it today you would earn a total of 800.00 from holding AURUBIS AG UNSPADR or generate 27.21% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Sandfire Resources Limited vs. AURUBIS AG UNSPADR
Performance |
Timeline |
Sandfire Resources |
AURUBIS AG UNSPADR |
Sandfire Resources and AURUBIS AG Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Sandfire Resources and AURUBIS AG
The main advantage of trading using opposite Sandfire Resources and AURUBIS AG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sandfire Resources position performs unexpectedly, AURUBIS AG 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 AURUBIS AG will offset losses from the drop in AURUBIS AG's long position.Sandfire Resources vs. BANKINTER ADR 2007 | Sandfire Resources vs. NXP Semiconductors NV | Sandfire Resources vs. Nordic Semiconductor ASA | Sandfire Resources vs. Scandinavian Tobacco Group |
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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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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