Correlation Between Centaurus Metals and Aumega Metals

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

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

Diversification Opportunities for Centaurus Metals and Aumega Metals

0.65

Correlation Coefficient

Centaurus Metals  Aumega Metals

Poor diversification

The 3 months correlation between Centaurus and Aumega is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Centaurus Metals and Aumega Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aumega Metals and Centaurus 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 Centaurus Metals are associated (or correlated) with Aumega Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aumega Metals has no effect on the direction of Centaurus Metals i.e., Centaurus Metals and Aumega Metals go up and down completely randomly.

Pair Corralation between Centaurus Metals and Aumega Metals

Assuming the 90 days trading horizon Centaurus Metals is expected to generate 2.65 times less return on investment than Aumega Metals. But when comparing it to its historical volatility, Centaurus Metals is 1.28 times less risky than Aumega Metals. It trades about 0.02 of its potential returns per unit of risk. Aumega Metals is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  4.00  in Aumega Metals on April 25, 2025 and sell it today you would earn a total of  0.20  from holding Aumega Metals or generate 5.0% return on investment over 90 days.

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

Centaurus Metals  vs.  Aumega Metals

Centaurus Metals

Risk-Adjusted Performance

Very Weak

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

Aumega Metals

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Aumega Metals are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain primary indicators, Aumega Metals may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with Centaurus Metals and Aumega Metals

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

The idea behind Centaurus Metals and Aumega 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.