Correlation Between Grand Ocean and Auras Technology

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

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

Diversification Opportunities for Grand Ocean and Auras Technology

0.67

Correlation Coefficient

Grand Ocean  Auras Technology

Poor diversification

The 3 months correlation between Grand and Auras is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Grand Ocean Retail and Auras Technology Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Auras Technology and Grand Ocean 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 Grand Ocean Retail 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 Grand Ocean i.e., Grand Ocean and Auras Technology go up and down completely randomly.

Pair Corralation between Grand Ocean and Auras Technology

Assuming the 90 days trading horizon Grand Ocean Retail is expected to generate 1.47 times more return on investment than Auras Technology. However, Grand Ocean is 1.47 times more volatile than Auras Technology Co. It trades about 0.15 of its potential returns per unit of risk. Auras Technology Co is currently generating about 0.08 per unit of risk. If you would invest  845.00  in Grand Ocean Retail on September 16, 2024 and sell it today you would earn a total of  395.00  from holding Grand Ocean Retail or generate 46.75% return on investment over 90 days.

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

Grand Ocean Retail  vs.  Auras Technology Co

Grand Ocean Retail

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Grand Ocean Retail are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Grand Ocean showed solid returns over the last few months and may actually be approaching a breakup point.

Auras Technology

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Auras Technology Co are ranked lower than 5 (%) 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 Grand Ocean and Auras Technology

The main advantage of trading using opposite Grand Ocean and Auras Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Grand Ocean 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 Grand Ocean Retail 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.

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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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.