Correlation Between Twelve Seas and Aura FAT
Can any of the company-specific risk be diversified away by investing in both Twelve Seas and Aura FAT 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 Twelve Seas and Aura FAT into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Twelve Seas Investment and Aura FAT Projects, you can compare the effects of market volatilities on Twelve Seas and Aura FAT 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 Twelve Seas with a short position of Aura FAT. Check out your portfolio center. Please also check ongoing floating volatility patterns of Twelve Seas and Aura FAT.
Diversification Opportunities for Twelve Seas and Aura FAT
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Twelve and Aura is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Twelve Seas Investment and Aura FAT Projects in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aura FAT Projects and Twelve Seas 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 Twelve Seas Investment are associated (or correlated) with Aura FAT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aura FAT Projects has no effect on the direction of Twelve Seas i.e., Twelve Seas and Aura FAT go up and down completely randomly.
Pair Corralation between Twelve Seas and Aura FAT
If you would invest (100.00) in Aura FAT Projects on January 10, 2025 and sell it today you would earn a total of 100.00 from holding Aura FAT Projects or generate -100.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 0.0% |
| Values | Daily Returns |
Twelve Seas Investment vs. Aura FAT Projects
Performance |
| Timeline |
| Twelve Seas Investment |
Risk-Adjusted Performance
Very Weak
Weak | Strong |
| Aura FAT Projects |
Risk-Adjusted Performance
Very Weak
Weak | Strong |
Twelve Seas and Aura FAT Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Twelve Seas and Aura FAT
The main advantage of trading using opposite Twelve Seas and Aura FAT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Twelve Seas position performs unexpectedly, Aura FAT 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 Aura FAT will offset losses from the drop in Aura FAT's long position.The idea behind Twelve Seas Investment and Aura FAT Projects 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.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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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