Correlation Between Albion Technology and Aurora Investment
Can any of the company-specific risk be diversified away by investing in both Albion Technology 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 Albion Technology and Aurora Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Albion Technology General and Aurora Investment Trust, you can compare the effects of market volatilities on Albion Technology 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 Albion Technology with a short position of Aurora Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Albion Technology and Aurora Investment.
Diversification Opportunities for Albion Technology and Aurora Investment
-0.14 | Correlation Coefficient |
Good diversification
The 3 months correlation between Albion and Aurora is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Albion Technology General 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 Albion Technology 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 Albion Technology General 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 Albion Technology i.e., Albion Technology and Aurora Investment go up and down completely randomly.
Pair Corralation between Albion Technology and Aurora Investment
Assuming the 90 days trading horizon Albion Technology is expected to generate 1.35 times less return on investment than Aurora Investment. But when comparing it to its historical volatility, Albion Technology General is 1.05 times less risky than Aurora Investment. It trades about 0.12 of its potential returns per unit of risk. Aurora Investment Trust is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 23,300 in Aurora Investment Trust on November 29, 2024 and sell it today you would earn a total of 700.00 from holding Aurora Investment Trust or generate 3.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Albion Technology General vs. Aurora Investment Trust
Performance |
| Timeline |
| Albion Technology General |
| Aurora Investment Trust |
Albion Technology and Aurora Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Albion Technology and Aurora Investment
The main advantage of trading using opposite Albion Technology and Aurora Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Albion Technology 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.| Albion Technology vs. Critical Metals Plc | Albion Technology vs. Science in Sport | Albion Technology vs. Gaztransport et Technigaz | Albion Technology vs. JB Hunt Transport |
| Aurora Investment vs. Power Metal Resources | Aurora Investment vs. Monster Beverage Corp | Aurora Investment vs. Fulcrum Metals PLC | Aurora Investment vs. Future Metals NL |
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 CEOs Directory module to screen CEOs from public companies around the world.
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