Correlation Between Aurora Investment and Retail Estates
Can any of the company-specific risk be diversified away by investing in both Aurora Investment and Retail Estates 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 Retail Estates 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 Retail Estates NV, you can compare the effects of market volatilities on Aurora Investment and Retail Estates 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 Retail Estates. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aurora Investment and Retail Estates.
Diversification Opportunities for Aurora Investment and Retail Estates
0.19 | Correlation Coefficient |
Average diversification
The 3 months correlation between Aurora and Retail is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Aurora Investment Trust and Retail Estates NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Retail Estates NV 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 Retail Estates. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Retail Estates NV has no effect on the direction of Aurora Investment i.e., Aurora Investment and Retail Estates go up and down completely randomly.
Pair Corralation between Aurora Investment and Retail Estates
Assuming the 90 days trading horizon Aurora Investment Trust is expected to under-perform the Retail Estates. But the stock apears to be less risky and, when comparing its historical volatility, Aurora Investment Trust is 6.06 times less risky than Retail Estates. The stock trades about -0.12 of its potential returns per unit of risk. The Retail Estates NV is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 7,210 in Retail Estates NV on August 30, 2024 and sell it today you would earn a total of 0.00 from holding Retail Estates NV or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aurora Investment Trust vs. Retail Estates NV
Performance |
| Timeline |
| Aurora Investment Trust |
| Retail Estates NV |
Aurora Investment and Retail Estates Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aurora Investment and Retail Estates
The main advantage of trading using opposite Aurora Investment and Retail Estates positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aurora Investment position performs unexpectedly, Retail Estates 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 Retail Estates will offset losses from the drop in Retail Estates' long position.| Aurora Investment vs. Samsung Electronics Co | Aurora Investment vs. Lendinvest PLC | Aurora Investment vs. Neometals | Aurora Investment vs. Coor Service Management |
| Retail Estates vs. Lendinvest PLC | Retail Estates vs. Neometals | Retail Estates vs. Albion Technology General | Retail Estates vs. Jupiter Fund Management |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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