Correlation Between Aeluma and Renesas Electronics
Can any of the company-specific risk be diversified away by investing in both Aeluma and Renesas Electronics 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 Aeluma and Renesas Electronics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aeluma Inc and Renesas Electronics, you can compare the effects of market volatilities on Aeluma and Renesas Electronics 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 Aeluma with a short position of Renesas Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aeluma and Renesas Electronics.
Diversification Opportunities for Aeluma and Renesas Electronics
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Aeluma and Renesas is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Aeluma Inc and Renesas Electronics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Renesas Electronics and Aeluma 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 Aeluma Inc are associated (or correlated) with Renesas Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Renesas Electronics has no effect on the direction of Aeluma i.e., Aeluma and Renesas Electronics go up and down completely randomly.
Pair Corralation between Aeluma and Renesas Electronics
Given the investment horizon of 90 days Aeluma Inc is expected to generate 1.33 times more return on investment than Renesas Electronics. However, Aeluma is 1.33 times more volatile than Renesas Electronics. It trades about 0.21 of its potential returns per unit of risk. Renesas Electronics is currently generating about -0.02 per unit of risk. If you would invest 259.00 in Aeluma Inc on August 29, 2024 and sell it today you would earn a total of 81.00 from holding Aeluma Inc or generate 31.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aeluma Inc vs. Renesas Electronics
Performance |
| Timeline |
| Aeluma Inc |
| Renesas Electronics |
Aeluma and Renesas Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aeluma and Renesas Electronics
The main advantage of trading using opposite Aeluma and Renesas Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aeluma position performs unexpectedly, Renesas Electronics 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 Renesas Electronics will offset losses from the drop in Renesas Electronics' long position.| Aeluma vs. Archer Materials Limited | Aeluma vs. Alphawave IP Group | Aeluma vs. BrainChip Holdings | Aeluma vs. Arteris |
| Renesas Electronics vs. Power Integrations | Renesas Electronics vs. Rohm Co Ltd | Renesas Electronics vs. MACOM Technology Solutions | Renesas Electronics vs. Renesas Electronics Corp |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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