Correlation Between Supermarket Income and Aurora Investment
Can any of the company-specific risk be diversified away by investing in both Supermarket Income 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 Supermarket Income and Aurora Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Supermarket Income REIT and Aurora Investment Trust, you can compare the effects of market volatilities on Supermarket Income 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 Supermarket Income with a short position of Aurora Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Supermarket Income and Aurora Investment.
Diversification Opportunities for Supermarket Income and Aurora Investment
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Supermarket and Aurora is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Supermarket Income REIT 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 Supermarket Income 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 Supermarket Income REIT 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 Supermarket Income i.e., Supermarket Income and Aurora Investment go up and down completely randomly.
Pair Corralation between Supermarket Income and Aurora Investment
Assuming the 90 days trading horizon Supermarket Income REIT is expected to under-perform the Aurora Investment. But the stock apears to be less risky and, when comparing its historical volatility, Supermarket Income REIT is 1.14 times less risky than Aurora Investment. The stock trades about -0.3 of its potential returns per unit of risk. The Aurora Investment Trust is currently generating about -0.16 of returns per unit of risk over similar time horizon. If you would invest 22,800 in Aurora Investment Trust on October 13, 2024 and sell it today you would lose (900.00) from holding Aurora Investment Trust or give up 3.95% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Supermarket Income REIT vs. Aurora Investment Trust
Performance |
| Timeline |
| Supermarket Income REIT |
| Aurora Investment Trust |
Supermarket Income and Aurora Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Supermarket Income and Aurora Investment
The main advantage of trading using opposite Supermarket Income and Aurora Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Supermarket Income 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.| Supermarket Income vs. Impax Asset Management | Supermarket Income vs. Bankers Investment Trust | Supermarket Income vs. Zegona Communications Plc | Supermarket Income vs. Deltex Medical Group |
| Aurora Investment vs. SupplyMe Capital PLC | Aurora Investment vs. SM Energy Co | Aurora Investment vs. FuelCell Energy | Aurora Investment vs. Grand Vision Media |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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