Correlation Between Aurelius Minerals and Heliostar Metals

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

By analyzing existing cross correlation between Aurelius Minerals and Heliostar Metals, you can compare the effects of market volatilities on Aurelius Minerals and Heliostar 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 Aurelius Minerals with a short position of Heliostar Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aurelius Minerals and Heliostar Metals.

Diversification Opportunities for Aurelius Minerals and Heliostar Metals

0.0

Correlation Coefficient

Aurelius Minerals  Heliostar Metals

Pay attention - limited upside

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

Pair Corralation between Aurelius Minerals and Heliostar Metals

Assuming the 90 days horizon Aurelius Minerals is expected to generate 3.58 times more return on investment than Heliostar Metals. However, Aurelius Minerals is 3.58 times more volatile than Heliostar Metals. It trades about 0.03 of its potential returns per unit of risk. Heliostar Metals is currently generating about 0.07 per unit of risk. If you would invest  3.61  in Aurelius Minerals on November 29, 2024 and sell it today you would lose (3.46) from holding Aurelius Minerals or give up 95.84% of portfolio value over 90 days.

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

Aurelius Minerals  vs.  Heliostar Metals

Aurelius Minerals

Risk-Adjusted Performance

Very Weak

Over the last 90 days Aurelius Minerals has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Aurelius Minerals is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Heliostar Metals

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Heliostar Metals are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Heliostar Metals reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Aurelius Minerals and Heliostar Metals

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

The idea behind Aurelius Minerals and Heliostar 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.

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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 Stocks Directory module to find actively traded stocks across global markets.