Correlation Between Orapi SA and Aurea SA
Can any of the company-specific risk be diversified away by investing in both Orapi SA and Aurea SA 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 Orapi SA and Aurea SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Orapi SA and Aurea SA, you can compare the effects of market volatilities on Orapi SA and Aurea SA 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 Orapi SA with a short position of Aurea SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Orapi SA and Aurea SA.
Diversification Opportunities for Orapi SA and Aurea SA
Modest diversification
The 3 months correlation between Orapi and Aurea is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Orapi SA and Aurea SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aurea SA and Orapi SA 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 Orapi SA are associated (or correlated) with Aurea SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aurea SA has no effect on the direction of Orapi SA i.e., Orapi SA and Aurea SA go up and down completely randomly.
Pair Corralation between Orapi SA and Aurea SA
Assuming the 90 days trading horizon Orapi SA is expected to generate 0.82 times more return on investment than Aurea SA. However, Orapi SA is 1.21 times less risky than Aurea SA. It trades about 0.04 of its potential returns per unit of risk. Aurea SA is currently generating about 0.0 per unit of risk. If you would invest 484.00 in Orapi SA on September 12, 2024 and sell it today you would earn a total of 166.00 from holding Orapi SA or generate 34.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Orapi SA vs. Aurea SA
Performance |
| Timeline |
| Orapi SA |
| Aurea SA |
Orapi SA and Aurea SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Orapi SA and Aurea SA
The main advantage of trading using opposite Orapi SA and Aurea SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Orapi SA position performs unexpectedly, Aurea SA 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 Aurea SA will offset losses from the drop in Aurea SA's long position.| Orapi SA vs. Sensorion SA | Orapi SA vs. Fiducial Office Solutions | Orapi SA vs. Manitou BF SA | Orapi SA vs. Ossiam Minimum Variance |
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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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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