Correlation Between Aurora Investment and METALL ZUG
Can any of the company-specific risk be diversified away by investing in both Aurora Investment and METALL ZUG 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 METALL ZUG 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 METALL ZUG AG, you can compare the effects of market volatilities on Aurora Investment and METALL ZUG 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 METALL ZUG. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aurora Investment and METALL ZUG.
Diversification Opportunities for Aurora Investment and METALL ZUG
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Aurora and METALL is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Aurora Investment Trust and METALL ZUG AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on METALL ZUG AG 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 METALL ZUG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of METALL ZUG AG has no effect on the direction of Aurora Investment i.e., Aurora Investment and METALL ZUG go up and down completely randomly.
Pair Corralation between Aurora Investment and METALL ZUG
Assuming the 90 days trading horizon Aurora Investment Trust is expected to generate 0.83 times more return on investment than METALL ZUG. However, Aurora Investment Trust is 1.2 times less risky than METALL ZUG. It trades about 0.03 of its potential returns per unit of risk. METALL ZUG AG is currently generating about -0.08 per unit of risk. If you would invest 20,943 in Aurora Investment Trust on September 12, 2024 and sell it today you would earn a total of 2,257 from holding Aurora Investment Trust or generate 10.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 85.92% |
| Values | Daily Returns |
Aurora Investment Trust vs. METALL ZUG AG
Performance |
| Timeline |
| Aurora Investment Trust |
| METALL ZUG AG |
Aurora Investment and METALL ZUG Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aurora Investment and METALL ZUG
The main advantage of trading using opposite Aurora Investment and METALL ZUG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aurora Investment position performs unexpectedly, METALL ZUG 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 METALL ZUG will offset losses from the drop in METALL ZUG's long position.| Aurora Investment vs. Samsung Electronics Co | Aurora Investment vs. Samsung Electronics Co | Aurora Investment vs. Hyundai Motor | Aurora Investment vs. Toyota Motor Corp |
| METALL ZUG vs. Hong Kong Land | METALL ZUG vs. Neometals | METALL ZUG vs. Coor Service Management | METALL ZUG vs. Fidelity Sustainable USD |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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