Correlation Between Aeris Environmental and Rand Mining

Can any of the company-specific risk be diversified away by investing in both Aeris Environmental and Rand Mining 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 Aeris Environmental and Rand Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Aeris Environmental and Rand Mining, you can compare the effects of market volatilities on Aeris Environmental and Rand Mining 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 Aeris Environmental with a short position of Rand Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aeris Environmental and Rand Mining.

Diversification Opportunities for Aeris Environmental and Rand Mining

-0.76

Correlation Coefficient

Aeris Environmental  Rand Mining

Pay attention - limited upside

The 3 months correlation between Aeris and Rand is -0.76. Overlapping area represents the amount of risk that can be diversified away by holding Aeris Environmental and Rand Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rand Mining and Aeris Environmental 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 Aeris Environmental are associated (or correlated) with Rand Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rand Mining has no effect on the direction of Aeris Environmental i.e., Aeris Environmental and Rand Mining go up and down completely randomly.

Pair Corralation between Aeris Environmental and Rand Mining

Assuming the 90 days trading horizon Aeris Environmental is expected to under-perform the Rand Mining. In addition to that, Aeris Environmental is 1.47 times more volatile than Rand Mining. It trades about -0.12 of its total potential returns per unit of risk. Rand Mining is currently generating about 0.05 per unit of volatility. If you would invest  156.00  in Rand Mining on December 20, 2024 and sell it today you would earn a total of  9.00  from holding Rand Mining or generate 5.77% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Aeris Environmental  vs.  Rand Mining

Aeris Environmental

Risk-Adjusted Performance

Very Weak

Over the last 90 days Aeris Environmental has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's forward indicators remain comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Rand Mining

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Rand Mining are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain fundamental indicators, Rand Mining may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Aeris Environmental and Rand Mining

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

The idea behind Aeris Environmental and Rand Mining 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.