Correlation Between Aurelia Metals and Snow Lake

Can any of the company-specific risk be diversified away by investing in both Aurelia Metals and Snow Lake 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 Snow Lake 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 Snow Lake Resources, you can compare the effects of market volatilities on Aurelia Metals and Snow Lake 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 Snow Lake. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aurelia Metals and Snow Lake.

Diversification Opportunities for Aurelia Metals and Snow Lake

-0.68

Correlation Coefficient

Aurelia Metals  Snow Lake

Excellent diversification

The 3 months correlation between Aurelia and Snow is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding Aurelia Metals Limited and Snow Lake Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Snow Lake Resources 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 Snow Lake. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Snow Lake Resources has no effect on the direction of Aurelia Metals i.e., Aurelia Metals and Snow Lake go up and down completely randomly.

Pair Corralation between Aurelia Metals and Snow Lake

Assuming the 90 days horizon Aurelia Metals Limited is expected to generate 0.1 times more return on investment than Snow Lake. However, Aurelia Metals Limited is 10.3 times less risky than Snow Lake. It trades about 0.12 of its potential returns per unit of risk. Snow Lake Resources is currently generating about -0.03 per unit of risk. If you would invest  12.00  in Aurelia Metals Limited on December 29, 2024 and sell it today you would earn a total of  1.00  from holding Aurelia Metals Limited or generate 8.33% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	95.31%
Values	Daily Returns

Aurelia Metals Limited  vs.  Snow Lake Resources

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.

Snow Lake Resources

Risk-Adjusted Performance

Very Weak

Over the last 90 days Snow Lake Resources has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fragile performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in April 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with Aurelia Metals and Snow Lake

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

The idea behind Aurelia Metals Limited and Snow Lake Resources 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.