Correlation Between CG Hi and Aurora World
Can any of the company-specific risk be diversified away by investing in both CG Hi 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 CG Hi and Aurora World into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CG Hi Tech and Aurora World, you can compare the effects of market volatilities on CG Hi 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 CG Hi with a short position of Aurora World. Check out your portfolio center. Please also check ongoing floating volatility patterns of CG Hi and Aurora World.
Diversification Opportunities for CG Hi and Aurora World
-0.71 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between 264660 and Aurora is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding CG Hi Tech and Aurora World in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aurora World and CG Hi 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 CG Hi Tech 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 CG Hi i.e., CG Hi and Aurora World go up and down completely randomly.
Pair Corralation between CG Hi and Aurora World
Assuming the 90 days trading horizon CG Hi Tech is expected to under-perform the Aurora World. In addition to that, CG Hi is 1.15 times more volatile than Aurora World. It trades about -0.21 of its total potential returns per unit of risk. Aurora World is currently generating about 0.27 per unit of volatility. If you would invest 537,000 in Aurora World on September 13, 2024 and sell it today you would earn a total of 83,000 from holding Aurora World or generate 15.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
CG Hi Tech vs. Aurora World
Performance |
| Timeline |
| CG Hi Tech |
| Aurora World |
CG Hi and Aurora World Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CG Hi and Aurora World
The main advantage of trading using opposite CG Hi and Aurora World positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CG Hi 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.The idea behind CG Hi Tech and Aurora World 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.| Aurora World vs. Daou Data Corp | Aurora World vs. Solution Advanced Technology | Aurora World vs. Busan Industrial Co | Aurora World vs. Busan Ind |
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 Stocks Directory module to find actively traded stocks across global markets.
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