Correlation Between DTC Enterprise and Aurora Design
Can any of the company-specific risk be diversified away by investing in both DTC Enterprise and Aurora Design 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 DTC Enterprise and Aurora Design into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between DTC Enterprise PCL and Aurora Design PCL, you can compare the effects of market volatilities on DTC Enterprise and Aurora Design 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 DTC Enterprise with a short position of Aurora Design. Check out your portfolio center. Please also check ongoing floating volatility patterns of DTC Enterprise and Aurora Design.
Diversification Opportunities for DTC Enterprise and Aurora Design
0.97 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between DTC and Aurora is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding DTC Enterprise PCL and Aurora Design PCL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aurora Design PCL and DTC Enterprise 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 DTC Enterprise PCL are associated (or correlated) with Aurora Design. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aurora Design PCL has no effect on the direction of DTC Enterprise i.e., DTC Enterprise and Aurora Design go up and down completely randomly.
Pair Corralation between DTC Enterprise and Aurora Design
Assuming the 90 days trading horizon DTC Enterprise is expected to generate 1.03 times less return on investment than Aurora Design. In addition to that, DTC Enterprise is 1.0 times more volatile than Aurora Design PCL. It trades about 0.08 of its total potential returns per unit of risk. Aurora Design PCL is currently generating about 0.08 per unit of volatility. If you would invest 1,300 in Aurora Design PCL on September 3, 2024 and sell it today you would earn a total of 160.00 from holding Aurora Design PCL or generate 12.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
DTC Enterprise PCL vs. Aurora Design PCL
Performance |
| Timeline |
| DTC Enterprise PCL |
| Aurora Design PCL |
DTC Enterprise and Aurora Design Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with DTC Enterprise and Aurora Design
The main advantage of trading using opposite DTC Enterprise and Aurora Design positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DTC Enterprise position performs unexpectedly, Aurora Design 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 Aurora Design will offset losses from the drop in Aurora Design's long position.| DTC Enterprise vs. Aurora Design PCL | DTC Enterprise vs. SCG Packaging Public | DTC Enterprise vs. Regional Container Lines | DTC Enterprise vs. Sabuy Technology Public |
| Aurora Design vs. Srinanaporn Marketing Public | Aurora Design vs. AP Public | Aurora Design vs. Mega Lifesciences Public | Aurora Design vs. Siam Global House |
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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