Correlation Between Aurora Solar and SinglePoint

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

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

Diversification Opportunities for Aurora Solar and SinglePoint

0.57

Correlation Coefficient

Aurora Solar  SinglePoint

Very weak diversification

The 3 months correlation between Aurora and SinglePoint is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Aurora Solar Technologies and SinglePoint in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SinglePoint and Aurora Solar 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 Aurora Solar Technologies are associated (or correlated) with SinglePoint. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SinglePoint has no effect on the direction of Aurora Solar i.e., Aurora Solar and SinglePoint go up and down completely randomly.

Pair Corralation between Aurora Solar and SinglePoint

Assuming the 90 days horizon Aurora Solar is expected to generate 2.59 times less return on investment than SinglePoint. But when comparing it to its historical volatility, Aurora Solar Technologies is 2.25 times less risky than SinglePoint. It trades about 0.01 of its potential returns per unit of risk. SinglePoint is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest  9.00  in SinglePoint on September 16, 2024 and sell it today you would lose (5.40) from holding SinglePoint or give up 60.0% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	83.08%
Values	Daily Returns

Aurora Solar Technologies  vs.  SinglePoint

Aurora Solar Technologies

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Aurora Solar Technologies has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Aurora Solar is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

SinglePoint

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days SinglePoint has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly inconsistent basic indicators, SinglePoint reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Aurora Solar and SinglePoint

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

The idea behind Aurora Solar Technologies and SinglePoint 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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.