Correlation Between Aurora Design and DTC Enterprise
Can any of the company-specific risk be diversified away by investing in both Aurora Design and DTC Enterprise 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 Design and DTC Enterprise into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aurora Design PCL and DTC Enterprise PCL, you can compare the effects of market volatilities on Aurora Design and DTC Enterprise 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 Design with a short position of DTC Enterprise. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aurora Design and DTC Enterprise.
Diversification Opportunities for Aurora Design and DTC Enterprise
0.97 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Aurora and DTC is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding Aurora Design PCL and DTC Enterprise PCL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DTC Enterprise PCL and Aurora Design 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 Design PCL are associated (or correlated) with DTC Enterprise. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DTC Enterprise PCL has no effect on the direction of Aurora Design i.e., Aurora Design and DTC Enterprise go up and down completely randomly.
Pair Corralation between Aurora Design and DTC Enterprise
Assuming the 90 days trading horizon Aurora Design PCL is expected to generate 1.0 times more return on investment than DTC Enterprise. However, Aurora Design PCL is 1.0 times less risky than DTC Enterprise. It trades about 0.04 of its potential returns per unit of risk. DTC Enterprise PCL is currently generating about 0.04 per unit of risk. If you would invest 1,914 in Aurora Design PCL on September 3, 2024 and sell it today you would lose (454.00) from holding Aurora Design PCL or give up 23.72% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aurora Design PCL vs. DTC Enterprise PCL
Performance |
| Timeline |
| Aurora Design PCL |
| DTC Enterprise PCL |
Aurora Design and DTC Enterprise Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aurora Design and DTC Enterprise
The main advantage of trading using opposite Aurora Design and DTC Enterprise positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aurora Design position performs unexpectedly, DTC Enterprise 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 DTC Enterprise will offset losses from the drop in DTC Enterprise's long position.| Aurora Design vs. Srinanaporn Marketing Public | Aurora Design vs. AP Public | Aurora Design vs. Mega Lifesciences Public | Aurora Design vs. Siam Global House |
| DTC Enterprise vs. Aurora Design PCL | DTC Enterprise vs. SCG Packaging Public | DTC Enterprise vs. Regional Container Lines | DTC Enterprise vs. Sabuy Technology Public |
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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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