Correlation Between Auras Technology and Farglory FTZ
Can any of the company-specific risk be diversified away by investing in both Auras Technology and Farglory FTZ 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 Farglory FTZ 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 Farglory FTZ Investment, you can compare the effects of market volatilities on Auras Technology and Farglory FTZ 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 Farglory FTZ. Check out your portfolio center. Please also check ongoing floating volatility patterns of Auras Technology and Farglory FTZ.
Diversification Opportunities for Auras Technology and Farglory FTZ
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Auras and Farglory is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Auras Technology Co and Farglory FTZ Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Farglory FTZ Investment 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 Farglory FTZ. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Farglory FTZ Investment has no effect on the direction of Auras Technology i.e., Auras Technology and Farglory FTZ go up and down completely randomly.
Pair Corralation between Auras Technology and Farglory FTZ
Assuming the 90 days trading horizon Auras Technology Co is expected to generate 2.66 times more return on investment than Farglory FTZ. However, Auras Technology is 2.66 times more volatile than Farglory FTZ Investment. It trades about 0.06 of its potential returns per unit of risk. Farglory FTZ Investment is currently generating about -0.03 per unit of risk. If you would invest 56,500 in Auras Technology Co on December 5, 2024 and sell it today you would earn a total of 9,600 from holding Auras Technology Co or generate 16.99% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Auras Technology Co vs. Farglory FTZ Investment
Performance |
Timeline |
Auras Technology |
Farglory FTZ Investment |
Auras Technology and Farglory FTZ Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Auras Technology and Farglory FTZ
The main advantage of trading using opposite Auras Technology and Farglory FTZ positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Auras Technology position performs unexpectedly, Farglory FTZ 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 Farglory FTZ will offset losses from the drop in Farglory FTZ's long position.Auras Technology vs. Camellia Metal Co | Auras Technology vs. China Metal Products | Auras Technology vs. Galaxy Software Services | Auras Technology vs. Onyx Healthcare |
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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.
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