Correlation Between Aurelia Metals and ARDAGH METAL

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

By analyzing existing cross correlation between Aurelia Metals Limited and ARDAGH METAL PACDL 0001, you can compare the effects of market volatilities on Aurelia Metals and ARDAGH METAL 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 Aurelia Metals with a short position of ARDAGH METAL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aurelia Metals and ARDAGH METAL.

Diversification Opportunities for Aurelia Metals and ARDAGH METAL

0.41

Correlation Coefficient

Aurelia Metals  ARDAGH METAL

Very weak diversification

The 3 months correlation between Aurelia and ARDAGH is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Aurelia Metals Limited and ARDAGH METAL PACDL 0001 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ARDAGH METAL PACDL and Aurelia 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 Aurelia Metals Limited are associated (or correlated) with ARDAGH METAL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ARDAGH METAL PACDL has no effect on the direction of Aurelia Metals i.e., Aurelia Metals and ARDAGH METAL go up and down completely randomly.

Pair Corralation between Aurelia Metals and ARDAGH METAL

Assuming the 90 days horizon Aurelia Metals Limited is expected to generate 1.38 times more return on investment than ARDAGH METAL. However, Aurelia Metals is 1.38 times more volatile than ARDAGH METAL PACDL 0001. It trades about 0.02 of its potential returns per unit of risk. ARDAGH METAL PACDL 0001 is currently generating about -0.05 per unit of risk. If you would invest  10.00  in Aurelia Metals Limited on October 6, 2024 and sell it today you would earn a total of  0.00  from holding Aurelia Metals Limited or generate 0.0% return on investment over 90 days.

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

Aurelia Metals Limited  vs.  ARDAGH METAL PACDL 0001

Aurelia Metals

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Aurelia Metals Limited are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, Aurelia Metals may actually be approaching a critical reversion point that can send shares even higher in February 2025.

ARDAGH METAL PACDL

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ARDAGH METAL PACDL 0001 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with Aurelia Metals and ARDAGH METAL

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

The idea behind Aurelia Metals Limited and ARDAGH METAL PACDL 0001 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.