Correlation Between Aurelia Metals and Mach7 Technologies
Can any of the company-specific risk be diversified away by investing in both Aurelia Metals and Mach7 Technologies 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 Mach7 Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aurelia Metals and Mach7 Technologies, you can compare the effects of market volatilities on Aurelia Metals and Mach7 Technologies 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 Mach7 Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aurelia Metals and Mach7 Technologies.
Diversification Opportunities for Aurelia Metals and Mach7 Technologies
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Aurelia and Mach7 is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Aurelia Metals and Mach7 Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mach7 Technologies 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 Mach7 Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mach7 Technologies has no effect on the direction of Aurelia Metals i.e., Aurelia Metals and Mach7 Technologies go up and down completely randomly.
Pair Corralation between Aurelia Metals and Mach7 Technologies
Assuming the 90 days trading horizon Aurelia Metals is expected to generate 1.02 times more return on investment than Mach7 Technologies. However, Aurelia Metals is 1.02 times more volatile than Mach7 Technologies. It trades about 0.16 of its potential returns per unit of risk. Mach7 Technologies is currently generating about 0.02 per unit of risk. If you would invest 18.00 in Aurelia Metals on December 29, 2024 and sell it today you would earn a total of 8.00 from holding Aurelia Metals or generate 44.44% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Aurelia Metals vs. Mach7 Technologies
Performance |
Timeline |
Aurelia Metals |
Mach7 Technologies |
Aurelia Metals and Mach7 Technologies Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Aurelia Metals and Mach7 Technologies
The main advantage of trading using opposite Aurelia Metals and Mach7 Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aurelia Metals position performs unexpectedly, Mach7 Technologies 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 Mach7 Technologies will offset losses from the drop in Mach7 Technologies' long position.Aurelia Metals vs. Northern Star Resources | Aurelia Metals vs. Alcoa Inc | Aurelia Metals vs. Evolution Mining | Aurelia Metals vs. Bluescope Steel |
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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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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