Correlation Between Industrial Tech and Aurora Acquisition

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Can any of the company-specific risk be diversified away by investing in both Industrial Tech and Aurora Acquisition 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 Industrial Tech and Aurora Acquisition into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Industrial Tech Acquisitions and Aurora Acquisition Corp, you can compare the effects of market volatilities on Industrial Tech and Aurora Acquisition 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 Industrial Tech with a short position of Aurora Acquisition. Check out your portfolio center. Please also check ongoing floating volatility patterns of Industrial Tech and Aurora Acquisition.

Diversification Opportunities for Industrial Tech and Aurora Acquisition

0.0
  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between Industrial and Aurora is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Industrial Tech Acquisitions and Aurora Acquisition Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aurora Acquisition Corp and Industrial Tech 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 Industrial Tech Acquisitions are associated (or correlated) with Aurora Acquisition. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aurora Acquisition Corp has no effect on the direction of Industrial Tech i.e., Industrial Tech and Aurora Acquisition go up and down completely randomly.

Pair Corralation between Industrial Tech and Aurora Acquisition

If you would invest  1,038  in Aurora Acquisition Corp on November 5, 2024 and sell it today you would earn a total of  0.00  from holding Aurora Acquisition Corp or generate 0.0% return on investment over 90 days.
Time Period3 Months [change]
DirectionFlat 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Industrial Tech Acquisitions  vs.  Aurora Acquisition Corp

 Performance 
       Timeline  
Industrial Tech Acqu 

Risk-Adjusted Performance

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Over the last 90 days Industrial Tech Acquisitions has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Industrial Tech is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.
Aurora Acquisition Corp 

Risk-Adjusted Performance

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Weak
 
Strong
Very Weak
Over the last 90 days Aurora Acquisition Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, Aurora Acquisition is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Industrial Tech and Aurora Acquisition Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Industrial Tech and Aurora Acquisition

The main advantage of trading using opposite Industrial Tech and Aurora Acquisition positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Industrial Tech position performs unexpectedly, Aurora Acquisition 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 Acquisition will offset losses from the drop in Aurora Acquisition's long position.
The idea behind Industrial Tech Acquisitions and Aurora Acquisition Corp 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.
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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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.

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