Correlation Between Solution Advanced and Aurora World
Can any of the company-specific risk be diversified away by investing in both Solution Advanced 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 Solution Advanced and Aurora World into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Solution Advanced Technology and Aurora World, you can compare the effects of market volatilities on Solution Advanced 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 Solution Advanced with a short position of Aurora World. Check out your portfolio center. Please also check ongoing floating volatility patterns of Solution Advanced and Aurora World.
Diversification Opportunities for Solution Advanced and Aurora World
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Solution and Aurora is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Solution Advanced Technology and Aurora World in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aurora World and Solution Advanced 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 Solution Advanced Technology 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 Solution Advanced i.e., Solution Advanced and Aurora World go up and down completely randomly.
Pair Corralation between Solution Advanced and Aurora World
Assuming the 90 days trading horizon Solution Advanced Technology is expected to generate 2.92 times more return on investment than Aurora World. However, Solution Advanced is 2.92 times more volatile than Aurora World. It trades about 0.01 of its potential returns per unit of risk. Aurora World is currently generating about 0.02 per unit of risk. If you would invest 247,500 in Solution Advanced Technology on December 4, 2024 and sell it today you would lose (22,500) from holding Solution Advanced Technology or give up 9.09% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Solution Advanced Technology vs. Aurora World
Performance |
| Timeline |
| Solution Advanced |
| Aurora World |
Solution Advanced and Aurora World Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Solution Advanced and Aurora World
The main advantage of trading using opposite Solution Advanced and Aurora World positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Solution Advanced 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.| Solution Advanced vs. InnoTherapy | Solution Advanced vs. Aprogen Healthcare Games | Solution Advanced vs. SS TECH | Solution Advanced vs. INFINITT Healthcare Co |
| Aurora World vs. Spolytech Co | Aurora World vs. A Tech Solution Co | Aurora World vs. GAMEVIL | Aurora World vs. Hanyang Digitech 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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