Correlation Between Jetwell Computer and Auras Technology

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

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

Diversification Opportunities for Jetwell Computer and Auras Technology

-0.27

Correlation Coefficient

Jetwell Computer  Auras Technology

Very good diversification

The 3 months correlation between Jetwell and Auras is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Jetwell Computer Co and Auras Technology Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Auras Technology and Jetwell Computer 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 Jetwell Computer Co are associated (or correlated) with Auras Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Auras Technology has no effect on the direction of Jetwell Computer i.e., Jetwell Computer and Auras Technology go up and down completely randomly.

Pair Corralation between Jetwell Computer and Auras Technology

Assuming the 90 days trading horizon Jetwell Computer is expected to generate 1.4 times less return on investment than Auras Technology. But when comparing it to its historical volatility, Jetwell Computer Co is 1.19 times less risky than Auras Technology. It trades about 0.09 of its potential returns per unit of risk. Auras Technology Co is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest  14,482  in Auras Technology Co on September 17, 2024 and sell it today you would earn a total of  54,518  from holding Auras Technology Co or generate 376.45% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Jetwell Computer Co  vs.  Auras Technology Co

Jetwell Computer

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Jetwell Computer Co has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Jetwell Computer is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Auras Technology

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Auras Technology Co are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Auras Technology showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Jetwell Computer and Auras Technology

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

The idea behind Jetwell Computer Co and Auras Technology Co 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.