Correlation Between Aurora Investment and Ross Stores
Can any of the company-specific risk be diversified away by investing in both Aurora Investment and Ross Stores 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 Ross Stores 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 Ross Stores, you can compare the effects of market volatilities on Aurora Investment and Ross Stores 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 Ross Stores. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aurora Investment and Ross Stores.
Diversification Opportunities for Aurora Investment and Ross Stores
-0.07 | Correlation Coefficient |
Good diversification
The 3 months correlation between Aurora and Ross is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding Aurora Investment Trust and Ross Stores in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ross Stores 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 Ross Stores. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ross Stores has no effect on the direction of Aurora Investment i.e., Aurora Investment and Ross Stores go up and down completely randomly.
Pair Corralation between Aurora Investment and Ross Stores
Assuming the 90 days trading horizon Aurora Investment is expected to generate 1.48 times less return on investment than Ross Stores. But when comparing it to its historical volatility, Aurora Investment Trust is 1.15 times less risky than Ross Stores. It trades about 0.04 of its potential returns per unit of risk. Ross Stores is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 11,501 in Ross Stores on September 14, 2024 and sell it today you would earn a total of 3,940 from holding Ross Stores or generate 34.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 97.99% |
| Values | Daily Returns |
Aurora Investment Trust vs. Ross Stores
Performance |
| Timeline |
| Aurora Investment Trust |
| Ross Stores |
Aurora Investment and Ross Stores Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aurora Investment and Ross Stores
The main advantage of trading using opposite Aurora Investment and Ross Stores positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aurora Investment position performs unexpectedly, Ross Stores 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 Ross Stores will offset losses from the drop in Ross Stores' long position.| Aurora Investment vs. Catalyst Media Group | Aurora Investment vs. CATLIN GROUP | Aurora Investment vs. Tamburi Investment Partners | Aurora Investment vs. Magnora ASA |
| Ross Stores vs. Aurora Investment Trust | Ross Stores vs. GreenX Metals | Ross Stores vs. Cornish Metals | Ross Stores vs. Panther Metals PLC |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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