Correlation Between AuraSource and Atco
Can any of the company-specific risk be diversified away by investing in both AuraSource and Atco 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 AuraSource and Atco into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AuraSource and Atco, you can compare the effects of market volatilities on AuraSource and Atco 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 AuraSource with a short position of Atco. Check out your portfolio center. Please also check ongoing floating volatility patterns of AuraSource and Atco.
Diversification Opportunities for AuraSource and Atco
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between AuraSource and Atco is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding AuraSource and Atco in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Atco and AuraSource 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 AuraSource are associated (or correlated) with Atco. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Atco has no effect on the direction of AuraSource i.e., AuraSource and Atco go up and down completely randomly.
Pair Corralation between AuraSource and Atco
Given the investment horizon of 90 days AuraSource is expected to under-perform the Atco. In addition to that, AuraSource is 23.91 times more volatile than Atco. It trades about -0.21 of its total potential returns per unit of risk. Atco is currently generating about 0.03 per unit of volatility. If you would invest 3,501 in Atco on August 24, 2024 and sell it today you would earn a total of 21.00 from holding Atco or generate 0.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
AuraSource vs. Atco
Performance |
| Timeline |
| AuraSource |
| Atco |
AuraSource and Atco Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AuraSource and Atco
The main advantage of trading using opposite AuraSource and Atco positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AuraSource position performs unexpectedly, Atco 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 Atco will offset losses from the drop in Atco's long position.| AuraSource vs. Element Solutions | AuraSource vs. Orion Engineered Carbons | AuraSource vs. Minerals Technologies | AuraSource vs. Ingevity 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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