Correlation Between Aurora Investment and Induction Healthcare
Can any of the company-specific risk be diversified away by investing in both Aurora Investment and Induction Healthcare 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 Induction Healthcare 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 Induction Healthcare Group, you can compare the effects of market volatilities on Aurora Investment and Induction Healthcare 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 Induction Healthcare. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aurora Investment and Induction Healthcare.
Diversification Opportunities for Aurora Investment and Induction Healthcare
-0.61 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Aurora and Induction is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Aurora Investment Trust and Induction Healthcare Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Induction Healthcare 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 Induction Healthcare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Induction Healthcare has no effect on the direction of Aurora Investment i.e., Aurora Investment and Induction Healthcare go up and down completely randomly.
Pair Corralation between Aurora Investment and Induction Healthcare
Assuming the 90 days trading horizon Aurora Investment Trust is expected to generate 0.26 times more return on investment than Induction Healthcare. However, Aurora Investment Trust is 3.78 times less risky than Induction Healthcare. It trades about 0.0 of its potential returns per unit of risk. Induction Healthcare Group is currently generating about -0.08 per unit of risk. If you would invest 23,086 in Aurora Investment Trust on September 2, 2024 and sell it today you would lose (86.00) from holding Aurora Investment Trust or give up 0.37% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aurora Investment Trust vs. Induction Healthcare Group
Performance |
| Timeline |
| Aurora Investment Trust |
| Induction Healthcare |
Aurora Investment and Induction Healthcare Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aurora Investment and Induction Healthcare
The main advantage of trading using opposite Aurora Investment and Induction Healthcare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aurora Investment position performs unexpectedly, Induction Healthcare 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 Induction Healthcare will offset losses from the drop in Induction Healthcare's long position.| Aurora Investment vs. Toyota Motor Corp | Aurora Investment vs. SoftBank Group Corp | Aurora Investment vs. OTP Bank Nyrt | Aurora Investment vs. Las Vegas Sands |
| Induction Healthcare vs. Samsung Electronics Co | Induction Healthcare vs. Samsung Electronics Co | Induction Healthcare vs. Hyundai Motor | Induction Healthcare vs. Toyota Motor Corp |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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