Correlation Between Cuckoo Electronics and Aurora World
Can any of the company-specific risk be diversified away by investing in both Cuckoo Electronics and Aurora World 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 Cuckoo Electronics and Aurora World into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cuckoo Electronics Co and Aurora World, you can compare the effects of market volatilities on Cuckoo Electronics and Aurora World 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 Cuckoo Electronics with a short position of Aurora World. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cuckoo Electronics and Aurora World.
Diversification Opportunities for Cuckoo Electronics and Aurora World
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between Cuckoo and Aurora is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Cuckoo Electronics Co and Aurora World in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aurora World and Cuckoo Electronics 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 Cuckoo Electronics Co are associated (or correlated) with Aurora World. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aurora World has no effect on the direction of Cuckoo Electronics i.e., Cuckoo Electronics and Aurora World go up and down completely randomly.
Pair Corralation between Cuckoo Electronics and Aurora World
Assuming the 90 days trading horizon Cuckoo Electronics Co is expected to generate 0.88 times more return on investment than Aurora World. However, Cuckoo Electronics Co is 1.13 times less risky than Aurora World. It trades about 0.09 of its potential returns per unit of risk. Aurora World is currently generating about 0.03 per unit of risk. If you would invest 2,325,000 in Cuckoo Electronics Co on September 24, 2024 and sell it today you would earn a total of 60,000 from holding Cuckoo Electronics Co or generate 2.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cuckoo Electronics Co vs. Aurora World
Performance |
| Timeline |
| Cuckoo Electronics |
| Aurora World |
Cuckoo Electronics and Aurora World Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cuckoo Electronics and Aurora World
The main advantage of trading using opposite Cuckoo Electronics and Aurora World positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cuckoo Electronics position performs unexpectedly, Aurora World 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 World will offset losses from the drop in Aurora World's long position.| Cuckoo Electronics vs. Woori Technology Investment | Cuckoo Electronics vs. Samsung Card Co | Cuckoo Electronics vs. Korea Real Estate | Cuckoo Electronics vs. CHOROKBAEM PANY Co |
| Aurora World vs. Woori Technology Investment | Aurora World vs. Samsung Card Co | Aurora World vs. Korea Real Estate | Aurora World 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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