Correlation Between EON SE and AuraSource
Can any of the company-specific risk be diversified away by investing in both EON SE and AuraSource 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 EON SE and AuraSource into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between EON SE ADR and AuraSource, you can compare the effects of market volatilities on EON SE and AuraSource 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 EON SE with a short position of AuraSource. Check out your portfolio center. Please also check ongoing floating volatility patterns of EON SE and AuraSource.
Diversification Opportunities for EON SE and AuraSource
-0.76 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between EON and AuraSource is -0.76. Overlapping area represents the amount of risk that can be diversified away by holding EON SE ADR and AuraSource in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AuraSource and EON SE 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 EON SE ADR are associated (or correlated) with AuraSource. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AuraSource has no effect on the direction of EON SE i.e., EON SE and AuraSource go up and down completely randomly.
Pair Corralation between EON SE and AuraSource
If you would invest 1,060 in EON SE ADR on August 24, 2024 and sell it today you would earn a total of 0.00 from holding EON SE ADR or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 4.55% |
| Values | Daily Returns |
EON SE ADR vs. AuraSource
Performance |
| Timeline |
| EON SE ADR |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| AuraSource |
EON SE and AuraSource Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with EON SE and AuraSource
The main advantage of trading using opposite EON SE and AuraSource positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EON SE position performs unexpectedly, AuraSource 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 AuraSource will offset losses from the drop in AuraSource's long position.The idea behind EON SE ADR and AuraSource 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.| AuraSource vs. Element Solutions | AuraSource vs. Orion Engineered Carbons | AuraSource vs. Minerals Technologies | AuraSource vs. Ingevity Corp |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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