Correlation Between Aurora Investment and Supermarket Income
Can any of the company-specific risk be diversified away by investing in both Aurora Investment and Supermarket Income 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 Supermarket Income 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 Supermarket Income REIT, you can compare the effects of market volatilities on Aurora Investment and Supermarket Income 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 Supermarket Income. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aurora Investment and Supermarket Income.
Diversification Opportunities for Aurora Investment and Supermarket Income
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Aurora and Supermarket is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Aurora Investment Trust and Supermarket Income REIT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Supermarket Income REIT 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 Supermarket Income. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Supermarket Income REIT has no effect on the direction of Aurora Investment i.e., Aurora Investment and Supermarket Income go up and down completely randomly.
Pair Corralation between Aurora Investment and Supermarket Income
Assuming the 90 days trading horizon Aurora Investment Trust is expected to under-perform the Supermarket Income. But the stock apears to be less risky and, when comparing its historical volatility, Aurora Investment Trust is 1.04 times less risky than Supermarket Income. The stock trades about -0.07 of its potential returns per unit of risk. The Supermarket Income REIT is currently generating about -0.04 of returns per unit of risk over similar time horizon. If you would invest 7,295 in Supermarket Income REIT on September 24, 2024 and sell it today you would lose (535.00) from holding Supermarket Income REIT or give up 7.33% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aurora Investment Trust vs. Supermarket Income REIT
Performance |
| Timeline |
| Aurora Investment Trust |
| Supermarket Income REIT |
Aurora Investment and Supermarket Income Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aurora Investment and Supermarket Income
The main advantage of trading using opposite Aurora Investment and Supermarket Income positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aurora Investment position performs unexpectedly, Supermarket Income 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 Supermarket Income will offset losses from the drop in Supermarket Income'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 |
| Supermarket Income vs. Finnair Oyj | Supermarket Income vs. Bisichi Mining PLC | Supermarket Income vs. Wheaton Precious Metals | Supermarket Income vs. Mindflair 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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