Correlation Between Cornish Metals and Aramis Group

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

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

Diversification Opportunities for Cornish Metals and Aramis Group

-0.08

Correlation Coefficient

Cornish Metals  Aramis Group

Good diversification

The 3 months correlation between Cornish and Aramis is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Cornish Metals and Aramis Group SAS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aramis Group SAS and Cornish 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 Cornish Metals are associated (or correlated) with Aramis Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aramis Group SAS has no effect on the direction of Cornish Metals i.e., Cornish Metals and Aramis Group go up and down completely randomly.

Pair Corralation between Cornish Metals and Aramis Group

Assuming the 90 days trading horizon Cornish Metals is expected to under-perform the Aramis Group. In addition to that, Cornish Metals is 1.16 times more volatile than Aramis Group SAS. It trades about 0.0 of its total potential returns per unit of risk. Aramis Group SAS is currently generating about 0.09 per unit of volatility. If you would invest  736.00  in Aramis Group SAS on December 4, 2024 and sell it today you would earn a total of  72.00  from holding Aramis Group SAS or generate 9.78% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.39%
Values	Daily Returns

Cornish Metals  vs.  Aramis Group SAS

Cornish Metals

Risk-Adjusted Performance

Very Weak

Over the last 90 days Cornish Metals has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Cornish Metals is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Aramis Group SAS

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Aramis Group SAS are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Aramis Group may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Cornish Metals and Aramis Group

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

The idea behind Cornish Metals and Aramis Group SAS 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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.