Correlation Between FiscalNote Holdings and Aurora Innovation
Can any of the company-specific risk be diversified away by investing in both FiscalNote Holdings and Aurora Innovation 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 FiscalNote Holdings and Aurora Innovation into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FiscalNote Holdings and Aurora Innovation, you can compare the effects of market volatilities on FiscalNote Holdings and Aurora Innovation 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 FiscalNote Holdings with a short position of Aurora Innovation. Check out your portfolio center. Please also check ongoing floating volatility patterns of FiscalNote Holdings and Aurora Innovation.
Diversification Opportunities for FiscalNote Holdings and Aurora Innovation
-0.43 | Correlation Coefficient |
Very good diversification
The 3 months correlation between FiscalNote and Aurora is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding FiscalNote Holdings and Aurora Innovation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aurora Innovation and FiscalNote Holdings 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 FiscalNote Holdings are associated (or correlated) with Aurora Innovation. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aurora Innovation has no effect on the direction of FiscalNote Holdings i.e., FiscalNote Holdings and Aurora Innovation go up and down completely randomly.
Pair Corralation between FiscalNote Holdings and Aurora Innovation
Given the investment horizon of 90 days FiscalNote Holdings is expected to under-perform the Aurora Innovation. But the stock apears to be less risky and, when comparing its historical volatility, FiscalNote Holdings is 1.97 times less risky than Aurora Innovation. The stock trades about -0.12 of its potential returns per unit of risk. The Aurora Innovation is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 414.00 in Aurora Innovation on August 28, 2024 and sell it today you would earn a total of 231.00 from holding Aurora Innovation or generate 55.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
FiscalNote Holdings vs. Aurora Innovation
Performance |
| Timeline |
| FiscalNote Holdings |
| Aurora Innovation |
FiscalNote Holdings and Aurora Innovation Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FiscalNote Holdings and Aurora Innovation
The main advantage of trading using opposite FiscalNote Holdings and Aurora Innovation positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FiscalNote Holdings position performs unexpectedly, Aurora Innovation 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 Innovation will offset losses from the drop in Aurora Innovation's long position.| FiscalNote Holdings vs. Magic Empire Global | FiscalNote Holdings vs. Zhong Yang Financial | FiscalNote Holdings vs. Netcapital | FiscalNote Holdings vs. Lazard |
| Aurora Innovation vs. FiscalNote Holdings | Aurora Innovation vs. Innodata | Aurora Innovation vs. International Business Machines | Aurora Innovation vs. BigBearai Holdings |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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