Correlation Between Aurora Innovation and Blackstone
Can any of the company-specific risk be diversified away by investing in both Aurora Innovation and Blackstone 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 Blackstone into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aurora Innovation and Blackstone Group, you can compare the effects of market volatilities on Aurora Innovation and Blackstone 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 Blackstone. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aurora Innovation and Blackstone.
Diversification Opportunities for Aurora Innovation and Blackstone
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Aurora and Blackstone is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Aurora Innovation and Blackstone Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Blackstone Group 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 Blackstone. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Blackstone Group has no effect on the direction of Aurora Innovation i.e., Aurora Innovation and Blackstone go up and down completely randomly.
Pair Corralation between Aurora Innovation and Blackstone
Assuming the 90 days horizon Aurora Innovation is expected to generate 8.77 times more return on investment than Blackstone. However, Aurora Innovation is 8.77 times more volatile than Blackstone Group. It trades about 0.06 of its potential returns per unit of risk. Blackstone Group is currently generating about 0.39 per unit of risk. If you would invest 105.00 in Aurora Innovation on August 25, 2024 and sell it today you would lose (3.00) from holding Aurora Innovation or give up 2.86% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Aurora Innovation vs. Blackstone Group
Performance |
| Timeline |
| Aurora Innovation |
| Blackstone Group |
Aurora Innovation and Blackstone Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aurora Innovation and Blackstone
The main advantage of trading using opposite Aurora Innovation and Blackstone positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aurora Innovation position performs unexpectedly, Blackstone 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 Blackstone will offset losses from the drop in Blackstone's long position.The idea behind Aurora Innovation and Blackstone Group 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.| Blackstone vs. PowerUp Acquisition Corp | Blackstone vs. Aurora Innovation | Blackstone vs. HUMANA INC | Blackstone vs. Aquagold International |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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