Correlation Between Eline Entertainment and Aurora Solar
Can any of the company-specific risk be diversified away by investing in both Eline Entertainment and Aurora Solar 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 Eline Entertainment and Aurora Solar into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Eline Entertainment Group and Aurora Solar Technologies, you can compare the effects of market volatilities on Eline Entertainment and Aurora Solar 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 Eline Entertainment with a short position of Aurora Solar. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eline Entertainment and Aurora Solar.
Diversification Opportunities for Eline Entertainment and Aurora Solar
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Eline and Aurora is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Eline Entertainment Group and Aurora Solar Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aurora Solar Technologies and Eline Entertainment 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 Eline Entertainment Group are associated (or correlated) with Aurora Solar. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aurora Solar Technologies has no effect on the direction of Eline Entertainment i.e., Eline Entertainment and Aurora Solar go up and down completely randomly.
Pair Corralation between Eline Entertainment and Aurora Solar
Given the investment horizon of 90 days Eline Entertainment Group is expected to generate 2.13 times more return on investment than Aurora Solar. However, Eline Entertainment is 2.13 times more volatile than Aurora Solar Technologies. It trades about 0.1 of its potential returns per unit of risk. Aurora Solar Technologies is currently generating about 0.04 per unit of risk. If you would invest 0.05 in Eline Entertainment Group on September 3, 2024 and sell it today you would lose (0.03) from holding Eline Entertainment Group or give up 60.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Eline Entertainment Group vs. Aurora Solar Technologies
Performance |
| Timeline |
| Eline Entertainment |
| Aurora Solar Technologies |
Eline Entertainment and Aurora Solar Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eline Entertainment and Aurora Solar
The main advantage of trading using opposite Eline Entertainment and Aurora Solar positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eline Entertainment position performs unexpectedly, Aurora Solar 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 Solar will offset losses from the drop in Aurora Solar's long position.| Eline Entertainment vs. Icon Media Holdings | Eline Entertainment vs. Green Leaf Innovations | Eline Entertainment vs. Plandai Biotech | Eline Entertainment vs. All American Gld |
| Aurora Solar vs. Eline Entertainment Group | Aurora Solar vs. Green Leaf Innovations | Aurora Solar vs. Plandai Biotech | Aurora Solar vs. All American Gld |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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