Correlation Between Timberline Resources and Aurion Resources

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

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

Diversification Opportunities for Timberline Resources and Aurion Resources

0.0

Correlation Coefficient

Timberline Resources  Aurion Resources

Pay attention - limited upside

The 3 months correlation between Timberline and Aurion is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Timberline Resources and Aurion Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aurion Resources and Timberline Resources 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 Timberline Resources are associated (or correlated) with Aurion Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aurion Resources has no effect on the direction of Timberline Resources i.e., Timberline Resources and Aurion Resources go up and down completely randomly.

Pair Corralation between Timberline Resources and Aurion Resources

If you would invest  58.00  in Aurion Resources on November 29, 2024 and sell it today you would lose (5.00) from holding Aurion Resources or give up 8.62% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Timberline Resources  vs.  Aurion Resources

Timberline Resources

Risk-Adjusted Performance

Very Weak

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

Aurion Resources

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Aurion Resources are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Aurion Resources reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Timberline Resources and Aurion Resources

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

The idea behind Timberline Resources and Aurion 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.