Correlation Between Aurelia Metals and Neometals

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

Diversification Opportunities for Aurelia Metals and Neometals

0.0

Correlation Coefficient

Aurelia Metals  Neometals

Pay attention - limited upside

The 3 months correlation between Aurelia and Neometals is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Aurelia Metals Limited and Neometals Ltd ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Neometals ADR 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 Neometals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Neometals ADR has no effect on the direction of Aurelia Metals i.e., Aurelia Metals and Neometals go up and down completely randomly.

Pair Corralation between Aurelia Metals and Neometals

If you would invest  12.00  in Aurelia Metals Limited on December 30, 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	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Aurelia Metals Limited  vs.  Neometals Ltd ADR

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.

Neometals ADR

Risk-Adjusted Performance

Very Weak

Over the last 90 days Neometals Ltd ADR has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, Neometals is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Aurelia Metals and Neometals

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

The idea behind Aurelia Metals Limited and Neometals Ltd ADR 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.