Correlation Between Aura Minerals and Linamar
Can any of the company-specific risk be diversified away by investing in both Aura Minerals and Linamar 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 Aura Minerals and Linamar into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aura Minerals and Linamar, you can compare the effects of market volatilities on Aura Minerals and Linamar 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 Aura Minerals with a short position of Linamar. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aura Minerals and Linamar.
Diversification Opportunities for Aura Minerals and Linamar
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Aura and Linamar is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Aura Minerals and Linamar in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Linamar and Aura 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 Aura Minerals are associated (or correlated) with Linamar. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Linamar has no effect on the direction of Aura Minerals i.e., Aura Minerals and Linamar go up and down completely randomly.
Pair Corralation between Aura Minerals and Linamar
Assuming the 90 days trading horizon Aura Minerals is expected to generate 1.44 times more return on investment than Linamar. However, Aura Minerals is 1.44 times more volatile than Linamar. It trades about 0.09 of its potential returns per unit of risk. Linamar is currently generating about -0.08 per unit of risk. If you would invest 1,581 in Aura Minerals on September 25, 2024 and sell it today you would earn a total of 185.00 from holding Aura Minerals or generate 11.7% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Aura Minerals vs. Linamar
Performance |
Timeline |
Aura Minerals |
Linamar |
Aura Minerals and Linamar Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Aura Minerals and Linamar
The main advantage of trading using opposite Aura Minerals and Linamar positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aura Minerals position performs unexpectedly, Linamar 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 Linamar will offset losses from the drop in Linamar's long position.Aura Minerals vs. Wildsky Resources | Aura Minerals vs. Q Gold Resources | Aura Minerals vs. Plato Gold Corp | Aura Minerals vs. MAS Gold Corp |
Linamar vs. Martinrea International | Linamar vs. Magna International | Linamar vs. CCL Industries | Linamar vs. Stella Jones |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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