Correlation Between Peach Property and Aurora Investment
Can any of the company-specific risk be diversified away by investing in both Peach Property and Aurora Investment 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 Peach Property and Aurora Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Peach Property Group and Aurora Investment Trust, you can compare the effects of market volatilities on Peach Property and Aurora Investment 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 Peach Property with a short position of Aurora Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Peach Property and Aurora Investment.
Diversification Opportunities for Peach Property and Aurora Investment
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Peach and Aurora is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Peach Property Group and Aurora Investment Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aurora Investment Trust and Peach Property 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 Peach Property Group are associated (or correlated) with Aurora Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aurora Investment Trust has no effect on the direction of Peach Property i.e., Peach Property and Aurora Investment go up and down completely randomly.
Pair Corralation between Peach Property and Aurora Investment
Assuming the 90 days trading horizon Peach Property Group is expected to generate 21.67 times more return on investment than Aurora Investment. However, Peach Property is 21.67 times more volatile than Aurora Investment Trust. It trades about 0.12 of its potential returns per unit of risk. Aurora Investment Trust is currently generating about -0.05 per unit of risk. If you would invest 885.00 in Peach Property Group on September 3, 2024 and sell it today you would lose (30.00) from holding Peach Property Group or give up 3.39% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.22% |
| Values | Daily Returns |
Peach Property Group vs. Aurora Investment Trust
Performance |
| Timeline |
| Peach Property Group |
| Aurora Investment Trust |
Peach Property and Aurora Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Peach Property and Aurora Investment
The main advantage of trading using opposite Peach Property and Aurora Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Peach Property position performs unexpectedly, Aurora Investment 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 Aurora Investment will offset losses from the drop in Aurora Investment's long position.| Peach Property vs. Raytheon Technologies Corp | Peach Property vs. Eastman Chemical Co | Peach Property vs. L3Harris Technologies | Peach Property vs. Roper Technologies |
| Aurora Investment vs. Qurate Retail Series | Aurora Investment vs. Lundin Mining Corp | Aurora Investment vs. Gamma Communications PLC | Aurora Investment vs. Southern Copper Corp |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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