Correlation Between Auden Techno and CyberTAN Technology

Can any of the company-specific risk be diversified away by investing in both Auden Techno and CyberTAN 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 Auden Techno and CyberTAN Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Auden Techno and CyberTAN Technology, you can compare the effects of market volatilities on Auden Techno and CyberTAN 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 Auden Techno with a short position of CyberTAN Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Auden Techno and CyberTAN Technology.

Diversification Opportunities for Auden Techno and CyberTAN Technology

0.31

Correlation Coefficient

Auden Techno  CyberTAN Technology

Weak diversification

The 3 months correlation between Auden and CyberTAN is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Auden Techno and CyberTAN Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CyberTAN Technology and Auden Techno 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 Auden Techno are associated (or correlated) with CyberTAN Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CyberTAN Technology has no effect on the direction of Auden Techno i.e., Auden Techno and CyberTAN Technology go up and down completely randomly.

Pair Corralation between Auden Techno and CyberTAN Technology

Assuming the 90 days trading horizon Auden Techno is expected to generate 1.35 times more return on investment than CyberTAN Technology. However, Auden Techno is 1.35 times more volatile than CyberTAN Technology. It trades about -0.07 of its potential returns per unit of risk. CyberTAN Technology is currently generating about -0.22 per unit of risk. If you would invest  11,050  in Auden Techno on December 30, 2024 and sell it today you would lose (1,150) from holding Auden Techno or give up 10.41% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Auden Techno  vs.  CyberTAN Technology

Auden Techno

Risk-Adjusted Performance

Very Weak

Over the last 90 days Auden Techno has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest abnormal performance, the Stock's basic indicators remain stable and the latest fuss on Wall Street may also be a sign of long-term gains for the venture sophisticated investors.

CyberTAN Technology

Risk-Adjusted Performance

Very Weak

Over the last 90 days CyberTAN Technology has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in April 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Pair Trading with Auden Techno and CyberTAN Technology

The main advantage of trading using opposite Auden Techno and CyberTAN Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Auden Techno position performs unexpectedly, CyberTAN 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 CyberTAN Technology will offset losses from the drop in CyberTAN Technology's long position.

The idea behind Auden Techno and CyberTAN Technology 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.

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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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.