Correlation Between Aurora Innovation and Target Global
Can any of the company-specific risk be diversified away by investing in both Aurora Innovation and Target Global 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 Target Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aurora Innovation and Target Global Acquisition, you can compare the effects of market volatilities on Aurora Innovation and Target Global 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 Target Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aurora Innovation and Target Global.
Diversification Opportunities for Aurora Innovation and Target Global
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Aurora and Target is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Aurora Innovation and Target Global Acquisition in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Target Global Acquisition 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 Target Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Target Global Acquisition has no effect on the direction of Aurora Innovation i.e., Aurora Innovation and Target Global go up and down completely randomly.
Pair Corralation between Aurora Innovation and Target Global
Assuming the 90 days horizon Aurora Innovation is expected to generate 796.24 times more return on investment than Target Global. However, Aurora Innovation is 796.24 times more volatile than Target Global Acquisition. It trades about 0.08 of its potential returns per unit of risk. Target Global Acquisition is currently generating about -0.21 per unit of risk. If you would invest 101.00 in Aurora Innovation on August 26, 2024 and sell it today you would earn a total of 1.00 from holding Aurora Innovation or generate 0.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aurora Innovation vs. Target Global Acquisition
Performance |
| Timeline |
| Aurora Innovation |
| Target Global Acquisition |
Aurora Innovation and Target Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aurora Innovation and Target Global
The main advantage of trading using opposite Aurora Innovation and Target Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aurora Innovation position performs unexpectedly, Target Global 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 Target Global will offset losses from the drop in Target Global's long position.The idea behind Aurora Innovation and Target Global 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.| Target Global vs. PowerUp Acquisition Corp | Target Global vs. Aurora Innovation | Target Global vs. HUMANA INC | Target Global 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
Other Complementary Tools
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities |