Correlation Between Kenorland Minerals and Aurelia Metals

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

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

Diversification Opportunities for Kenorland Minerals and Aurelia Metals

0.51

Correlation Coefficient

Kenorland Minerals  Aurelia Metals

Very weak diversification

The 3 months correlation between Kenorland and Aurelia is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Kenorland Minerals and Aurelia Metals Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aurelia Metals and Kenorland 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 Kenorland Minerals are associated (or correlated) with Aurelia Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aurelia Metals has no effect on the direction of Kenorland Minerals i.e., Kenorland Minerals and Aurelia Metals go up and down completely randomly.

Pair Corralation between Kenorland Minerals and Aurelia Metals

Assuming the 90 days horizon Kenorland Minerals is expected to generate 0.85 times more return on investment than Aurelia Metals. However, Kenorland Minerals is 1.17 times less risky than Aurelia Metals. It trades about 0.05 of its potential returns per unit of risk. Aurelia Metals Limited is currently generating about 0.02 per unit of risk. If you would invest  71.00  in Kenorland Minerals on September 3, 2024 and sell it today you would earn a total of  5.00  from holding Kenorland Minerals or generate 7.04% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	98.46%
Values	Daily Returns

Kenorland Minerals  vs.  Aurelia Metals Limited

Kenorland Minerals

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Kenorland Minerals are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile fundamental indicators, Kenorland Minerals may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Aurelia Metals

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Aurelia Metals Limited are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, Aurelia Metals is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Kenorland Minerals and Aurelia Metals

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

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