Correlation Between OD6 Metals and Aeris Resources

Can any of the company-specific risk be diversified away by investing in both OD6 Metals and Aeris Resources 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 OD6 Metals and Aeris Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between OD6 Metals and Aeris Resources, you can compare the effects of market volatilities on OD6 Metals and Aeris Resources 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 OD6 Metals with a short position of Aeris Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of OD6 Metals and Aeris Resources.

Diversification Opportunities for OD6 Metals and Aeris Resources

-0.34

Correlation Coefficient

OD6 Metals  Aeris Resources

Very good diversification

The 3 months correlation between OD6 and Aeris is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding OD6 Metals and Aeris Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aeris Resources and OD6 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 OD6 Metals are associated (or correlated) with Aeris Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aeris Resources has no effect on the direction of OD6 Metals i.e., OD6 Metals and Aeris Resources go up and down completely randomly.

Pair Corralation between OD6 Metals and Aeris Resources

Assuming the 90 days trading horizon OD6 Metals is expected to under-perform the Aeris Resources. In addition to that, OD6 Metals is 1.07 times more volatile than Aeris Resources. It trades about -0.1 of its total potential returns per unit of risk. Aeris Resources is currently generating about 0.06 per unit of volatility. If you would invest  17.00  in Aeris Resources on December 29, 2024 and sell it today you would earn a total of  2.00  from holding Aeris Resources or generate 11.76% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.44%
Values	Daily Returns

OD6 Metals  vs.  Aeris Resources

OD6 Metals

Risk-Adjusted Performance

Very Weak

Over the last 90 days OD6 Metals has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Aeris Resources

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Aeris Resources are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Aeris Resources unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with OD6 Metals and Aeris Resources

The main advantage of trading using opposite OD6 Metals and Aeris Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if OD6 Metals position performs unexpectedly, Aeris Resources 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 Aeris Resources will offset losses from the drop in Aeris Resources' long position.

The idea behind OD6 Metals and Aeris Resources 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.