Correlation Between Aurora World and Cuckoo Electronics
Can any of the company-specific risk be diversified away by investing in both Aurora World and Cuckoo Electronics 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 Aurora World and Cuckoo Electronics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aurora World and Cuckoo Electronics Co, you can compare the effects of market volatilities on Aurora World and Cuckoo Electronics 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 Aurora World with a short position of Cuckoo Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aurora World and Cuckoo Electronics.
Diversification Opportunities for Aurora World and Cuckoo Electronics
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between Aurora and Cuckoo is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Aurora World and Cuckoo Electronics Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cuckoo Electronics and Aurora World 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 Aurora World are associated (or correlated) with Cuckoo Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cuckoo Electronics has no effect on the direction of Aurora World i.e., Aurora World and Cuckoo Electronics go up and down completely randomly.
Pair Corralation between Aurora World and Cuckoo Electronics
Assuming the 90 days trading horizon Aurora World is expected to under-perform the Cuckoo Electronics. But the stock apears to be less risky and, when comparing its historical volatility, Aurora World is 1.12 times less risky than Cuckoo Electronics. The stock trades about -0.05 of its potential returns per unit of risk. The Cuckoo Electronics Co is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 1,955,000 in Cuckoo Electronics Co on September 24, 2024 and sell it today you would earn a total of 430,000 from holding Cuckoo Electronics Co or generate 21.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aurora World vs. Cuckoo Electronics Co
Performance |
| Timeline |
| Aurora World |
| Cuckoo Electronics |
Aurora World and Cuckoo Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aurora World and Cuckoo Electronics
The main advantage of trading using opposite Aurora World and Cuckoo Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aurora World position performs unexpectedly, Cuckoo Electronics 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 Cuckoo Electronics will offset losses from the drop in Cuckoo Electronics' long position.| Aurora World vs. Woori Technology Investment | Aurora World vs. Samsung Card Co | Aurora World vs. Korea Real Estate | Aurora World vs. CHOROKBAEM PANY Co |
| Cuckoo Electronics vs. Woori Technology Investment | Cuckoo Electronics vs. Samsung Card Co | Cuckoo Electronics vs. Korea Real Estate | Cuckoo Electronics vs. CHOROKBAEM PANY Co |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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