Correlation Between Aurora Acquisition and Magnum Opus
Can any of the company-specific risk be diversified away by investing in both Aurora Acquisition and Magnum Opus 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 Acquisition and Magnum Opus into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aurora Acquisition Corp and Magnum Opus Acquisition, you can compare the effects of market volatilities on Aurora Acquisition and Magnum Opus 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 Acquisition with a short position of Magnum Opus. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aurora Acquisition and Magnum Opus.
Diversification Opportunities for Aurora Acquisition and Magnum Opus
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Aurora and Magnum is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Aurora Acquisition Corp and Magnum Opus Acquisition in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Magnum Opus Acquisition and Aurora Acquisition 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 Acquisition Corp are associated (or correlated) with Magnum Opus. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Magnum Opus Acquisition has no effect on the direction of Aurora Acquisition i.e., Aurora Acquisition and Magnum Opus go up and down completely randomly.
Pair Corralation between Aurora Acquisition and Magnum Opus
If you would invest (100.00) in Magnum Opus Acquisition on November 19, 2024 and sell it today you would earn a total of 100.00 from holding Magnum Opus Acquisition or generate -100.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aurora Acquisition Corp vs. Magnum Opus Acquisition
Performance |
| Timeline |
| Aurora Acquisition Corp |
Risk-Adjusted Performance
Very Weak
Weak | Strong |
| Magnum Opus Acquisition |
Risk-Adjusted Performance
Very Weak
Weak | Strong |
Aurora Acquisition and Magnum Opus Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aurora Acquisition and Magnum Opus
The main advantage of trading using opposite Aurora Acquisition and Magnum Opus positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aurora Acquisition position performs unexpectedly, Magnum Opus 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 Magnum Opus will offset losses from the drop in Magnum Opus' long position.The idea behind Aurora Acquisition Corp and Magnum Opus Acquisition 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.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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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