Correlation Between Aurora Solar and Dow Jones
Can any of the company-specific risk be diversified away by investing in both Aurora Solar and Dow Jones 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 Solar and Dow Jones into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aurora Solar Technologies and Dow Jones Industrial, you can compare the effects of market volatilities on Aurora Solar and Dow Jones 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 Solar with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aurora Solar and Dow Jones.
Diversification Opportunities for Aurora Solar and Dow Jones
-0.8 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Aurora and Dow is -0.8. Overlapping area represents the amount of risk that can be diversified away by holding Aurora Solar Technologies and Dow Jones Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dow Jones Industrial and Aurora Solar 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 Solar Technologies are associated (or correlated) with Dow Jones. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dow Jones Industrial has no effect on the direction of Aurora Solar i.e., Aurora Solar and Dow Jones go up and down completely randomly.
Pair Corralation between Aurora Solar and Dow Jones
Assuming the 90 days horizon Aurora Solar Technologies is expected to under-perform the Dow Jones. In addition to that, Aurora Solar is 15.31 times more volatile than Dow Jones Industrial. It trades about 0.0 of its total potential returns per unit of risk. Dow Jones Industrial is currently generating about 0.37 per unit of volatility. If you would invest 4,176,346 in Dow Jones Industrial on September 1, 2024 and sell it today you would earn a total of 314,719 from holding Dow Jones Industrial or generate 7.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aurora Solar Technologies vs. Dow Jones Industrial
Performance |
| Timeline |
Aurora Solar and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
Aurora Solar Technologies
Pair trading matchups for Aurora Solar
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with Aurora Solar and Dow Jones
The main advantage of trading using opposite Aurora Solar and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aurora Solar position performs unexpectedly, Dow Jones 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 Dow Jones will offset losses from the drop in Dow Jones' long position.| Aurora Solar vs. BCE Inc | Aurora Solar vs. Axiologix | Aurora Solar vs. Advanced Info Service | Aurora Solar vs. HUMANA INC |
| Dow Jones vs. Catalyst Pharmaceuticals | Dow Jones vs. Sphere Entertainment Co | Dow Jones vs. National CineMedia | Dow Jones vs. Mink Therapeutics |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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