Correlation Between Aurelia Metals and Regis Healthcare

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

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

Diversification Opportunities for Aurelia Metals and Regis Healthcare

0.45

Correlation Coefficient

Aurelia Metals  Regis Healthcare

Very weak diversification

The 3 months correlation between Aurelia and Regis is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Aurelia Metals and Regis Healthcare in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Regis Healthcare 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 Regis Healthcare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Regis Healthcare has no effect on the direction of Aurelia Metals i.e., Aurelia Metals and Regis Healthcare go up and down completely randomly.

Pair Corralation between Aurelia Metals and Regis Healthcare

Assuming the 90 days trading horizon Aurelia Metals is expected to generate 2.28 times more return on investment than Regis Healthcare. However, Aurelia Metals is 2.28 times more volatile than Regis Healthcare. It trades about 0.17 of its potential returns per unit of risk. Regis Healthcare is currently generating about 0.07 per unit of risk. If you would invest  17.00  in Aurelia Metals on December 20, 2024 and sell it today you would earn a total of  8.00  from holding Aurelia Metals or generate 47.06% return on investment over 90 days.

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

Aurelia Metals  vs.  Regis Healthcare

Aurelia Metals

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Aurelia Metals are ranked lower than 13 (%) 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.

Regis Healthcare

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Regis Healthcare are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain technical and fundamental indicators, Regis Healthcare may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Aurelia Metals and Regis Healthcare

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

The idea behind Aurelia Metals and Regis Healthcare 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.

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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.