Correlation Between United Fire and Aurora Technology
Can any of the company-specific risk be diversified away by investing in both United Fire and Aurora Technology 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 United Fire and Aurora Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between United Fire Group and Aurora Technology Acquisition, you can compare the effects of market volatilities on United Fire and Aurora Technology 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 United Fire with a short position of Aurora Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of United Fire and Aurora Technology.
Diversification Opportunities for United Fire and Aurora Technology
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between United and Aurora is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding United Fire Group and Aurora Technology Acquisition in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aurora Technology and United Fire 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 United Fire Group are associated (or correlated) with Aurora Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aurora Technology has no effect on the direction of United Fire i.e., United Fire and Aurora Technology go up and down completely randomly.
Pair Corralation between United Fire and Aurora Technology
If you would invest 1,954 in United Fire Group on September 1, 2024 and sell it today you would earn a total of 1,106 from holding United Fire Group or generate 56.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 4.76% |
| Values | Daily Returns |
United Fire Group vs. Aurora Technology Acquisition
Performance |
| Timeline |
| United Fire Group |
| Aurora Technology |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
United Fire and Aurora Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with United Fire and Aurora Technology
The main advantage of trading using opposite United Fire and Aurora Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United Fire position performs unexpectedly, Aurora Technology 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 Technology will offset losses from the drop in Aurora Technology's long position.| United Fire vs. Donegal Group B | United Fire vs. Horace Mann Educators | United Fire vs. Donegal Group A | United Fire vs. Global Indemnity PLC |
| Aurora Technology vs. Teleflex Incorporated | Aurora Technology vs. Kaltura | Aurora Technology vs. ServiceNow | Aurora Technology vs. Valneva SE ADR |
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 Stocks Directory module to find actively traded stocks across global markets.
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