Correlation Between FC Investment and Aurora Investment
Can any of the company-specific risk be diversified away by investing in both FC Investment and Aurora Investment 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 FC Investment and Aurora Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FC Investment Trust and Aurora Investment Trust, you can compare the effects of market volatilities on FC Investment and Aurora Investment 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 FC Investment with a short position of Aurora Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of FC Investment and Aurora Investment.
Diversification Opportunities for FC Investment and Aurora Investment
-0.82 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between FCIT and Aurora is -0.82. Overlapping area represents the amount of risk that can be diversified away by holding FC Investment Trust and Aurora Investment Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aurora Investment Trust and FC Investment 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 FC Investment Trust are associated (or correlated) with Aurora Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aurora Investment Trust has no effect on the direction of FC Investment i.e., FC Investment and Aurora Investment go up and down completely randomly.
Pair Corralation between FC Investment and Aurora Investment
Assuming the 90 days trading horizon FC Investment Trust is expected to generate 0.67 times more return on investment than Aurora Investment. However, FC Investment Trust is 1.5 times less risky than Aurora Investment. It trades about 0.2 of its potential returns per unit of risk. Aurora Investment Trust is currently generating about -0.14 per unit of risk. If you would invest 102,641 in FC Investment Trust on August 31, 2024 and sell it today you would earn a total of 9,759 from holding FC Investment Trust or generate 9.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
FC Investment Trust vs. Aurora Investment Trust
Performance |
| Timeline |
| FC Investment Trust |
| Aurora Investment Trust |
FC Investment and Aurora Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FC Investment and Aurora Investment
The main advantage of trading using opposite FC Investment and Aurora Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FC Investment position performs unexpectedly, Aurora Investment 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 Investment will offset losses from the drop in Aurora Investment's long position.| FC Investment vs. Alaska Air Group | FC Investment vs. DXC Technology Co | FC Investment vs. Porvair plc | FC Investment vs. AIM ImmunoTech |
| Aurora Investment vs. Allianz Technology Trust | Aurora Investment vs. Sabien Technology Group | Aurora Investment vs. Albion Technology General | Aurora Investment vs. CompuGroup Medical AG |
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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
Other Complementary Tools
| CEOs Directory Screen CEOs from public companies around the world | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. |