Correlation Between Aurelia Metals and ECS Botanics

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

By analyzing existing cross correlation between Aurelia Metals and ECS Botanics Holdings, you can compare the effects of market volatilities on Aurelia Metals and ECS Botanics 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 ECS Botanics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aurelia Metals and ECS Botanics.

Diversification Opportunities for Aurelia Metals and ECS Botanics

-0.53

Correlation Coefficient

Aurelia Metals  ECS Botanics

Excellent diversification

The 3 months correlation between Aurelia and ECS is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Aurelia Metals and ECS Botanics Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ECS Botanics Holdings 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 ECS Botanics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ECS Botanics Holdings has no effect on the direction of Aurelia Metals i.e., Aurelia Metals and ECS Botanics go up and down completely randomly.

Pair Corralation between Aurelia Metals and ECS Botanics

Assuming the 90 days trading horizon Aurelia Metals is expected to generate 0.94 times more return on investment than ECS Botanics. However, Aurelia Metals is 1.07 times less risky than ECS Botanics. It trades about 0.19 of its potential returns per unit of risk. ECS Botanics Holdings is currently generating about -0.07 per unit of risk. If you would invest  17.00  in Aurelia Metals on December 21, 2024 and sell it today you would earn a total of  9.00  from holding Aurelia Metals or generate 52.94% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	98.36%
Values	Daily Returns

Aurelia Metals  vs.  ECS Botanics Holdings

Aurelia Metals

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Aurelia Metals are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain forward indicators, Aurelia Metals unveiled solid returns over the last few months and may actually be approaching a breakup point.

ECS Botanics Holdings

Risk-Adjusted Performance

Very Weak

Over the last 90 days ECS Botanics Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic 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.

Pair Trading with Aurelia Metals and ECS Botanics

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

The idea behind Aurelia Metals and ECS Botanics Holdings 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.