Correlation Between Aurelia Metals and Nine Entertainment

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

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

Diversification Opportunities for Aurelia Metals and Nine Entertainment

-0.08

Correlation Coefficient

Aurelia Metals  Nine Entertainment

Good diversification

The 3 months correlation between Aurelia and Nine is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Aurelia Metals and Nine Entertainment Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nine Entertainment 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 Nine Entertainment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nine Entertainment has no effect on the direction of Aurelia Metals i.e., Aurelia Metals and Nine Entertainment go up and down completely randomly.

Pair Corralation between Aurelia Metals and Nine Entertainment

Assuming the 90 days trading horizon Aurelia Metals is expected to under-perform the Nine Entertainment. In addition to that, Aurelia Metals is 3.89 times more volatile than Nine Entertainment Co. It trades about -0.05 of its total potential returns per unit of risk. Nine Entertainment Co is currently generating about -0.03 per unit of volatility. If you would invest  126.00  in Nine Entertainment Co on September 26, 2024 and sell it today you would lose (1.00) from holding Nine Entertainment Co or give up 0.79% of portfolio value over 90 days.

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

Aurelia Metals  vs.  Nine Entertainment Co

Aurelia Metals

Risk-Adjusted Performance

1 of 100

Very Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Aurelia Metals are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable forward indicators, Aurelia Metals is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Nine Entertainment

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Nine Entertainment Co has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable fundamental indicators, Nine Entertainment is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Aurelia Metals and Nine Entertainment

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

The idea behind Aurelia Metals and Nine Entertainment Co 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.