Correlation Between Aurora Innovation and Cantaloupe
Can any of the company-specific risk be diversified away by investing in both Aurora Innovation and Cantaloupe 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 Innovation and Cantaloupe into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aurora Innovation and Cantaloupe, you can compare the effects of market volatilities on Aurora Innovation and Cantaloupe 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 Innovation with a short position of Cantaloupe. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aurora Innovation and Cantaloupe.
Diversification Opportunities for Aurora Innovation and Cantaloupe
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Aurora and Cantaloupe is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Aurora Innovation and Cantaloupe in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cantaloupe and Aurora Innovation 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 Innovation are associated (or correlated) with Cantaloupe. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cantaloupe has no effect on the direction of Aurora Innovation i.e., Aurora Innovation and Cantaloupe go up and down completely randomly.
Pair Corralation between Aurora Innovation and Cantaloupe
Considering the 90-day investment horizon Aurora Innovation is expected to generate 1.98 times more return on investment than Cantaloupe. However, Aurora Innovation is 1.98 times more volatile than Cantaloupe. It trades about 0.08 of its potential returns per unit of risk. Cantaloupe is currently generating about 0.08 per unit of risk. If you would invest 131.00 in Aurora Innovation on August 24, 2024 and sell it today you would earn a total of 518.00 from holding Aurora Innovation or generate 395.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aurora Innovation vs. Cantaloupe
Performance |
| Timeline |
| Aurora Innovation |
| Cantaloupe |
Aurora Innovation and Cantaloupe Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aurora Innovation and Cantaloupe
The main advantage of trading using opposite Aurora Innovation and Cantaloupe positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aurora Innovation position performs unexpectedly, Cantaloupe 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 Cantaloupe will offset losses from the drop in Cantaloupe's long position.| Aurora Innovation vs. CDW Corp | Aurora Innovation vs. Eshallgo Class A | Aurora Innovation vs. Amtech Systems | Aurora Innovation vs. Gold Fields Ltd |
| Cantaloupe vs. FiscalNote Holdings | Cantaloupe vs. CLPS Inc | Cantaloupe vs. Formula Systems 1985 | Cantaloupe vs. CSP Inc |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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