Correlation Between Aurelia Metals and C3 Metals

Can any of the company-specific risk be diversified away by investing in both Aurelia Metals and C3 Metals 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 C3 Metals into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Aurelia Metals Limited and C3 Metals, you can compare the effects of market volatilities on Aurelia Metals and C3 Metals 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 C3 Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aurelia Metals and C3 Metals.

Diversification Opportunities for Aurelia Metals and C3 Metals

0.91

Correlation Coefficient

Aurelia Metals  C3 Metals

Almost no diversification

The 3 months correlation between Aurelia and CUAUF is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Aurelia Metals Limited and C3 Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on C3 Metals 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 Limited are associated (or correlated) with C3 Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of C3 Metals has no effect on the direction of Aurelia Metals i.e., Aurelia Metals and C3 Metals go up and down completely randomly.

Pair Corralation between Aurelia Metals and C3 Metals

Assuming the 90 days horizon Aurelia Metals is expected to generate 15.07 times less return on investment than C3 Metals. But when comparing it to its historical volatility, Aurelia Metals Limited is 10.06 times less risky than C3 Metals. It trades about 0.12 of its potential returns per unit of risk. C3 Metals is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest  18.00  in C3 Metals on December 29, 2024 and sell it today you would earn a total of  28.00  from holding C3 Metals or generate 155.56% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	95.31%
Values	Daily Returns

Aurelia Metals Limited  vs.  C3 Metals

Aurelia Metals

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Aurelia Metals Limited are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Aurelia Metals may actually be approaching a critical reversion point that can send shares even higher in April 2025.

C3 Metals

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in C3 Metals are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak basic indicators, C3 Metals reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Aurelia Metals and C3 Metals

The main advantage of trading using opposite Aurelia Metals and C3 Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aurelia Metals position performs unexpectedly, C3 Metals 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 C3 Metals will offset losses from the drop in C3 Metals' long position.

The idea behind Aurelia Metals Limited and C3 Metals 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..