Correlation Between Aduro Clean and Estrella Immunopharma

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

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

Diversification Opportunities for Aduro Clean and Estrella Immunopharma

0.15

Correlation Coefficient

Aduro Clean  Estrella Immunopharma

Average diversification

The 3 months correlation between Aduro and Estrella is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Aduro Clean Technologies and Estrella Immunopharma in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Estrella Immunopharma and Aduro Clean 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 Aduro Clean Technologies are associated (or correlated) with Estrella Immunopharma. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Estrella Immunopharma has no effect on the direction of Aduro Clean i.e., Aduro Clean and Estrella Immunopharma go up and down completely randomly.

Pair Corralation between Aduro Clean and Estrella Immunopharma

Given the investment horizon of 90 days Aduro Clean Technologies is expected to generate 0.81 times more return on investment than Estrella Immunopharma. However, Aduro Clean Technologies is 1.23 times less risky than Estrella Immunopharma. It trades about 0.18 of its potential returns per unit of risk. Estrella Immunopharma is currently generating about 0.14 per unit of risk. If you would invest  449.00  in Aduro Clean Technologies on October 6, 2024 and sell it today you would earn a total of  158.00  from holding Aduro Clean Technologies or generate 35.19% return on investment over 90 days.

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

Aduro Clean Technologies  vs.  Estrella Immunopharma

Aduro Clean Technologies

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Aduro Clean Technologies are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Even with relatively inconsistent basic indicators, Aduro Clean reported solid returns over the last few months and may actually be approaching a breakup point.

Estrella Immunopharma

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Estrella Immunopharma are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite somewhat uncertain essential indicators, Estrella Immunopharma may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Aduro Clean and Estrella Immunopharma

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

The idea behind Aduro Clean Technologies and Estrella Immunopharma 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.