Correlation Between Spire Healthcare and Aurora Investment
Can any of the company-specific risk be diversified away by investing in both Spire Healthcare 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 Spire Healthcare and Aurora Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Spire Healthcare Group and Aurora Investment Trust, you can compare the effects of market volatilities on Spire Healthcare 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 Spire Healthcare with a short position of Aurora Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Spire Healthcare and Aurora Investment.
Diversification Opportunities for Spire Healthcare and Aurora Investment
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Spire and Aurora is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Spire Healthcare Group 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 Spire Healthcare 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 Spire Healthcare Group 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 Spire Healthcare i.e., Spire Healthcare and Aurora Investment go up and down completely randomly.
Pair Corralation between Spire Healthcare and Aurora Investment
Assuming the 90 days trading horizon Spire Healthcare Group is expected to generate 1.17 times more return on investment than Aurora Investment. However, Spire Healthcare is 1.17 times more volatile than Aurora Investment Trust. It trades about 0.01 of its potential returns per unit of risk. Aurora Investment Trust is currently generating about 0.0 per unit of risk. If you would invest 22,074 in Spire Healthcare Group on September 2, 2024 and sell it today you would earn a total of 476.00 from holding Spire Healthcare Group or generate 2.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Spire Healthcare Group vs. Aurora Investment Trust
Performance |
| Timeline |
| Spire Healthcare |
| Aurora Investment Trust |
Spire Healthcare and Aurora Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Spire Healthcare and Aurora Investment
The main advantage of trading using opposite Spire Healthcare and Aurora Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Spire Healthcare 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.| Spire Healthcare vs. Samsung Electronics Co | Spire Healthcare vs. Samsung Electronics Co | Spire Healthcare vs. Hyundai Motor | Spire Healthcare vs. Toyota Motor Corp |
| Aurora Investment vs. Toyota Motor Corp | Aurora Investment vs. SoftBank Group Corp | Aurora Investment vs. OTP Bank Nyrt | Aurora Investment vs. Las Vegas Sands |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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