Correlation Between AURUBIS AG and CHRYSALIS INVESTMENTS

Can any of the company-specific risk be diversified away by investing in both AURUBIS AG and CHRYSALIS INVESTMENTS 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 AURUBIS AG and CHRYSALIS INVESTMENTS into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between AURUBIS AG UNSPADR and CHRYSALIS INVESTMENTS LTD, you can compare the effects of market volatilities on AURUBIS AG and CHRYSALIS INVESTMENTS 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 AURUBIS AG with a short position of CHRYSALIS INVESTMENTS. Check out your portfolio center. Please also check ongoing floating volatility patterns of AURUBIS AG and CHRYSALIS INVESTMENTS.

Diversification Opportunities for AURUBIS AG and CHRYSALIS INVESTMENTS

0.32

Correlation Coefficient

AURUBIS AG  CHRYSALIS INVESTMENTS

Weak diversification

The 3 months correlation between AURUBIS and CHRYSALIS is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding AURUBIS AG UNSPADR and CHRYSALIS INVESTMENTS LTD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CHRYSALIS INVESTMENTS LTD and AURUBIS AG 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 AURUBIS AG UNSPADR are associated (or correlated) with CHRYSALIS INVESTMENTS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CHRYSALIS INVESTMENTS LTD has no effect on the direction of AURUBIS AG i.e., AURUBIS AG and CHRYSALIS INVESTMENTS go up and down completely randomly.

Pair Corralation between AURUBIS AG and CHRYSALIS INVESTMENTS

Assuming the 90 days trading horizon AURUBIS AG UNSPADR is expected to under-perform the CHRYSALIS INVESTMENTS. But the stock apears to be less risky and, when comparing its historical volatility, AURUBIS AG UNSPADR is 1.32 times less risky than CHRYSALIS INVESTMENTS. The stock trades about -0.39 of its potential returns per unit of risk. The CHRYSALIS INVESTMENTS LTD is currently generating about 0.25 of returns per unit of risk over similar time horizon. If you would invest  115.00  in CHRYSALIS INVESTMENTS LTD on October 10, 2024 and sell it today you would earn a total of  10.00  from holding CHRYSALIS INVESTMENTS LTD or generate 8.7% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

AURUBIS AG UNSPADR  vs.  CHRYSALIS INVESTMENTS LTD

AURUBIS AG UNSPADR

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in AURUBIS AG UNSPADR are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, AURUBIS AG reported solid returns over the last few months and may actually be approaching a breakup point.

CHRYSALIS INVESTMENTS LTD

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in CHRYSALIS INVESTMENTS LTD are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, CHRYSALIS INVESTMENTS reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with AURUBIS AG and CHRYSALIS INVESTMENTS

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

The idea behind AURUBIS AG UNSPADR and CHRYSALIS INVESTMENTS LTD 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.