Correlation Between Aurora Innovation and CHRISTUS

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Can any of the company-specific risk be diversified away by investing in both Aurora Innovation and CHRISTUS 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 CHRISTUS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aurora Innovation and CHRISTUS HEALTH 4341, you can compare the effects of market volatilities on Aurora Innovation and CHRISTUS 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 CHRISTUS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aurora Innovation and CHRISTUS.

Diversification Opportunities for Aurora Innovation and CHRISTUS

-0.12
  Correlation Coefficient

Good diversification

The 3 months correlation between Aurora and CHRISTUS is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Aurora Innovation and CHRISTUS HEALTH 4341 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CHRISTUS HEALTH 4341 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 CHRISTUS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CHRISTUS HEALTH 4341 has no effect on the direction of Aurora Innovation i.e., Aurora Innovation and CHRISTUS go up and down completely randomly.

Pair Corralation between Aurora Innovation and CHRISTUS

Considering the 90-day investment horizon Aurora Innovation is expected to generate 5.42 times more return on investment than CHRISTUS. However, Aurora Innovation is 5.42 times more volatile than CHRISTUS HEALTH 4341. It trades about 0.1 of its potential returns per unit of risk. CHRISTUS HEALTH 4341 is currently generating about 0.03 per unit of risk. If you would invest  320.00  in Aurora Innovation on September 3, 2024 and sell it today you would earn a total of  327.00  from holding Aurora Innovation or generate 102.19% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy63.25%
ValuesDaily Returns

Aurora Innovation  vs.  CHRISTUS HEALTH 4341

 Performance 
       Timeline  
Aurora Innovation 

Risk-Adjusted Performance

10 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in Aurora Innovation are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Even with relatively fragile basic indicators, Aurora Innovation reported solid returns over the last few months and may actually be approaching a breakup point.
CHRISTUS HEALTH 4341 

Risk-Adjusted Performance

1 of 100

 
Weak
 
Strong
Weak
Compared to the overall equity markets, risk-adjusted returns on investments in CHRISTUS HEALTH 4341 are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, CHRISTUS is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Aurora Innovation and CHRISTUS Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Aurora Innovation and CHRISTUS

The main advantage of trading using opposite Aurora Innovation and CHRISTUS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aurora Innovation position performs unexpectedly, CHRISTUS 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 CHRISTUS will offset losses from the drop in CHRISTUS's long position.
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The idea behind Aurora Innovation and CHRISTUS HEALTH 4341 pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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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