Correlation Between Aduro Clean and Golden Heaven

Can any of the company-specific risk be diversified away by investing in both Aduro Clean and Golden Heaven 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 Golden Heaven 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 Golden Heaven Group, you can compare the effects of market volatilities on Aduro Clean and Golden Heaven 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 Golden Heaven. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aduro Clean and Golden Heaven.

Diversification Opportunities for Aduro Clean and Golden Heaven

0.34

Correlation Coefficient

Aduro Clean  Golden Heaven

Weak diversification

The 3 months correlation between Aduro and Golden is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Aduro Clean Technologies and Golden Heaven Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Golden Heaven Group 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 Golden Heaven. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Golden Heaven Group has no effect on the direction of Aduro Clean i.e., Aduro Clean and Golden Heaven go up and down completely randomly.

Pair Corralation between Aduro Clean and Golden Heaven

Given the investment horizon of 90 days Aduro Clean is expected to generate 5.63 times less return on investment than Golden Heaven. But when comparing it to its historical volatility, Aduro Clean Technologies is 1.37 times less risky than Golden Heaven. It trades about 0.12 of its potential returns per unit of risk. Golden Heaven Group is currently generating about 0.5 of returns per unit of risk over similar time horizon. If you would invest  183.00  in Golden Heaven Group on October 10, 2024 and sell it today you would earn a total of  88.00  from holding Golden Heaven Group or generate 48.09% return on investment over 90 days.

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

Aduro Clean Technologies  vs.  Golden Heaven Group

Aduro Clean Technologies

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Aduro Clean Technologies are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Aduro Clean reported solid returns over the last few months and may actually be approaching a breakup point.

Golden Heaven Group

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Golden Heaven Group are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak technical indicators, Golden Heaven reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Aduro Clean and Golden Heaven

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

The idea behind Aduro Clean Technologies and Golden Heaven Group 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.