Correlation Between Aurora Investment and Carlsberg
Can any of the company-specific risk be diversified away by investing in both Aurora Investment and Carlsberg 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 Investment and Carlsberg into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aurora Investment Trust and Carlsberg AS B, you can compare the effects of market volatilities on Aurora Investment and Carlsberg 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 Investment with a short position of Carlsberg. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aurora Investment and Carlsberg.
Diversification Opportunities for Aurora Investment and Carlsberg
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Aurora and Carlsberg is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Aurora Investment Trust and Carlsberg AS B in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Carlsberg AS B and Aurora Investment 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 Investment Trust are associated (or correlated) with Carlsberg. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Carlsberg AS B has no effect on the direction of Aurora Investment i.e., Aurora Investment and Carlsberg go up and down completely randomly.
Pair Corralation between Aurora Investment and Carlsberg
Assuming the 90 days trading horizon Aurora Investment Trust is expected to generate 0.92 times more return on investment than Carlsberg. However, Aurora Investment Trust is 1.09 times less risky than Carlsberg. It trades about 0.03 of its potential returns per unit of risk. Carlsberg AS B is currently generating about -0.02 per unit of risk. If you would invest 20,070 in Aurora Investment Trust on September 2, 2024 and sell it today you would earn a total of 2,930 from holding Aurora Investment Trust or generate 14.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aurora Investment Trust vs. Carlsberg AS B
Performance |
| Timeline |
| Aurora Investment Trust |
| Carlsberg AS B |
Aurora Investment and Carlsberg Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aurora Investment and Carlsberg
The main advantage of trading using opposite Aurora Investment and Carlsberg positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aurora Investment position performs unexpectedly, Carlsberg 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 Carlsberg will offset losses from the drop in Carlsberg's long position.| Aurora Investment vs. Toyota Motor Corp | Aurora Investment vs. SoftBank Group Corp | Aurora Investment vs. OTP Bank Nyrt | Aurora Investment vs. Las Vegas Sands |
| Carlsberg vs. Alior Bank SA | Carlsberg vs. Regions Financial Corp | Carlsberg vs. Cincinnati Financial Corp | Carlsberg vs. MT Bank 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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