Correlation Between Parkd and Aurelia Metals

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

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

Diversification Opportunities for Parkd and Aurelia Metals

0.17

Correlation Coefficient

Parkd  Aurelia Metals

Average diversification

The 3 months correlation between Parkd and Aurelia is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Parkd and Aurelia Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aurelia Metals and Parkd 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 Parkd 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 Parkd i.e., Parkd and Aurelia Metals go up and down completely randomly.

Pair Corralation between Parkd and Aurelia Metals

Assuming the 90 days trading horizon Parkd is expected to generate 0.72 times more return on investment than Aurelia Metals. However, Parkd is 1.38 times less risky than Aurelia Metals. It trades about 0.01 of its potential returns per unit of risk. Aurelia Metals is currently generating about 0.0 per unit of risk. If you would invest  2.30  in Parkd on October 26, 2024 and sell it today you would earn a total of  0.00  from holding Parkd or generate 0.0% return on investment over 90 days.

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

Parkd  vs.  Aurelia Metals

Parkd

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Parkd are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable fundamental indicators, Parkd is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Aurelia Metals

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Parkd and Aurelia Metals

The main advantage of trading using opposite Parkd and Aurelia Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Parkd 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 Parkd and Aurelia Metals 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.