Correlation Between Aurora Design and Make To
Can any of the company-specific risk be diversified away by investing in both Aurora Design and Make To 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 Make To 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 Make To Win, you can compare the effects of market volatilities on Aurora Design and Make To 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 Make To. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aurora Design and Make To.
Diversification Opportunities for Aurora Design and Make To
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Aurora and Make is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Aurora Design PCL and Make To Win in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Make To Win 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 Make To. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Make To Win has no effect on the direction of Aurora Design i.e., Aurora Design and Make To go up and down completely randomly.
Pair Corralation between Aurora Design and Make To
Assuming the 90 days trading horizon Aurora Design PCL is expected to generate 1.37 times more return on investment than Make To. However, Aurora Design is 1.37 times more volatile than Make To Win. It trades about 0.0 of its potential returns per unit of risk. Make To Win is currently generating about -0.04 per unit of risk. If you would invest 1,470 in Aurora Design PCL on September 1, 2024 and sell it today you would lose (10.00) from holding Aurora Design PCL or give up 0.68% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aurora Design PCL vs. Make To Win
Performance |
| Timeline |
| Aurora Design PCL |
| Make To Win |
Aurora Design and Make To Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aurora Design and Make To
The main advantage of trading using opposite Aurora Design and Make To positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aurora Design position performs unexpectedly, Make To 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 Make To will offset losses from the drop in Make To's long position.| Aurora Design vs. AP Public | Aurora Design vs. TRC Construction Public | Aurora Design vs. Bangkok Expressway and | Aurora Design vs. Lohakit Metal Public |
| Make To vs. AP Public | Make To vs. TRC Construction Public | Make To vs. Bangkok Expressway and | Make To vs. Lohakit Metal 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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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