Correlation Between AuraSource and Engie SA
Can any of the company-specific risk be diversified away by investing in both AuraSource and Engie SA 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 Engie SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AuraSource and Engie SA ADR, you can compare the effects of market volatilities on AuraSource and Engie SA 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 Engie SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of AuraSource and Engie SA.
Diversification Opportunities for AuraSource and Engie SA
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between AuraSource and Engie is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding AuraSource and Engie SA ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Engie SA ADR 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 Engie SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Engie SA ADR has no effect on the direction of AuraSource i.e., AuraSource and Engie SA go up and down completely randomly.
Pair Corralation between AuraSource and Engie SA
Given the investment horizon of 90 days AuraSource is expected to generate 240.1 times more return on investment than Engie SA. However, AuraSource is 240.1 times more volatile than Engie SA ADR. It trades about 0.19 of its potential returns per unit of risk. Engie SA ADR is currently generating about -0.36 per unit of risk. If you would invest 0.03 in AuraSource on August 28, 2024 and sell it today you would earn a total of 0.00 from holding AuraSource or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
AuraSource vs. Engie SA ADR
Performance |
| Timeline |
| AuraSource |
| Engie SA ADR |
AuraSource and Engie SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AuraSource and Engie SA
The main advantage of trading using opposite AuraSource and Engie SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AuraSource position performs unexpectedly, Engie SA 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 Engie SA will offset losses from the drop in Engie SA's long position.| AuraSource vs. Energy of Minas | AuraSource vs. Canadian Utilities Limited | AuraSource vs. NorthWestern | AuraSource vs. Allete Inc |
| Engie SA vs. TransAlta Corp | Engie SA vs. Pampa Energia SA | Engie SA vs. Vistra Energy Corp | Engie SA vs. NRG Energy |
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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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