Correlation Between Aurora Investment and Falcon Oil
Can any of the company-specific risk be diversified away by investing in both Aurora Investment and Falcon Oil 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 Falcon Oil 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 Falcon Oil Gas, you can compare the effects of market volatilities on Aurora Investment and Falcon Oil 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 Falcon Oil. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aurora Investment and Falcon Oil.
Diversification Opportunities for Aurora Investment and Falcon Oil
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Aurora and Falcon is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Aurora Investment Trust and Falcon Oil Gas in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Falcon Oil Gas 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 Falcon Oil. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Falcon Oil Gas has no effect on the direction of Aurora Investment i.e., Aurora Investment and Falcon Oil go up and down completely randomly.
Pair Corralation between Aurora Investment and Falcon Oil
Assuming the 90 days trading horizon Aurora Investment Trust is expected to generate 0.42 times more return on investment than Falcon Oil. However, Aurora Investment Trust is 2.36 times less risky than Falcon Oil. It trades about -0.08 of its potential returns per unit of risk. Falcon Oil Gas is currently generating about -0.16 per unit of risk. If you would invest 23,300 in Aurora Investment Trust on September 13, 2024 and sell it today you would lose (450.00) from holding Aurora Investment Trust or give up 1.93% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aurora Investment Trust vs. Falcon Oil Gas
Performance |
| Timeline |
| Aurora Investment Trust |
| Falcon Oil Gas |
Aurora Investment and Falcon Oil Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aurora Investment and Falcon Oil
The main advantage of trading using opposite Aurora Investment and Falcon Oil positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aurora Investment position performs unexpectedly, Falcon Oil 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 Falcon Oil will offset losses from the drop in Falcon Oil's long position.| Aurora Investment vs. Catalyst Media Group | Aurora Investment vs. CATLIN GROUP | Aurora Investment vs. Tamburi Investment Partners | Aurora Investment vs. Magnora ASA |
| Falcon Oil vs. Zoom Video Communications | Falcon Oil vs. Enbridge | Falcon Oil vs. Endo International PLC | Falcon Oil vs. Quantum Blockchain Technologies |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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