Correlation Between Auras Technology and Gigabyte Technology

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

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

Diversification Opportunities for Auras Technology and Gigabyte Technology

0.76

Correlation Coefficient

Auras Technology  Gigabyte Technology

Poor diversification

The 3 months correlation between Auras and Gigabyte is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Auras Technology Co and Gigabyte Technology Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gigabyte Technology and Auras Technology 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 Auras Technology Co are associated (or correlated) with Gigabyte Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gigabyte Technology has no effect on the direction of Auras Technology i.e., Auras Technology and Gigabyte Technology go up and down completely randomly.

Pair Corralation between Auras Technology and Gigabyte Technology

Assuming the 90 days trading horizon Auras Technology Co is expected to under-perform the Gigabyte Technology. In addition to that, Auras Technology is 1.44 times more volatile than Gigabyte Technology Co. It trades about -0.07 of its total potential returns per unit of risk. Gigabyte Technology Co is currently generating about -0.05 per unit of volatility. If you would invest  27,450  in Gigabyte Technology Co on December 30, 2024 and sell it today you would lose (1,750) from holding Gigabyte Technology Co or give up 6.38% of portfolio value over 90 days.

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

Auras Technology Co  vs.  Gigabyte Technology Co

Auras Technology

Risk-Adjusted Performance

Very Weak

Over the last 90 days Auras Technology Co 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.

Gigabyte Technology

Risk-Adjusted Performance

Very Weak

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

Pair Trading with Auras Technology and Gigabyte Technology

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

The idea behind Auras Technology Co and Gigabyte 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.

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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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.