Correlation Between Aurora Investment and Naturhouse Health
Can any of the company-specific risk be diversified away by investing in both Aurora Investment and Naturhouse Health 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 Naturhouse Health 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 Naturhouse Health SA, you can compare the effects of market volatilities on Aurora Investment and Naturhouse Health 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 Naturhouse Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aurora Investment and Naturhouse Health.
Diversification Opportunities for Aurora Investment and Naturhouse Health
0.42 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Aurora and Naturhouse is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Aurora Investment Trust and Naturhouse Health SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Naturhouse Health 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 Naturhouse Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Naturhouse Health has no effect on the direction of Aurora Investment i.e., Aurora Investment and Naturhouse Health go up and down completely randomly.
Pair Corralation between Aurora Investment and Naturhouse Health
Assuming the 90 days trading horizon Aurora Investment is expected to generate 1.3 times less return on investment than Naturhouse Health. But when comparing it to its historical volatility, Aurora Investment Trust is 3.27 times less risky than Naturhouse Health. It trades about 0.03 of its potential returns per unit of risk. Naturhouse Health SA is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 176.00 in Naturhouse Health SA on August 31, 2024 and sell it today you would lose (8.00) from holding Naturhouse Health SA or give up 4.55% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 85.71% |
| Values | Daily Returns |
Aurora Investment Trust vs. Naturhouse Health SA
Performance |
| Timeline |
| Aurora Investment Trust |
| Naturhouse Health |
Aurora Investment and Naturhouse Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aurora Investment and Naturhouse Health
The main advantage of trading using opposite Aurora Investment and Naturhouse Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aurora Investment position performs unexpectedly, Naturhouse Health 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 Naturhouse Health will offset losses from the drop in Naturhouse Health's long position.| Aurora Investment vs. Allianz Technology Trust | Aurora Investment vs. Sabien Technology Group | Aurora Investment vs. Albion Technology General | Aurora Investment vs. CompuGroup Medical AG |
| Naturhouse Health vs. Fevertree Drinks Plc | Naturhouse Health vs. Cairn Homes PLC | Naturhouse Health vs. Kinnevik Investment AB | Naturhouse Health vs. Livermore Investments Group |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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