Correlation Between AES and AuraSource

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

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

Diversification Opportunities for AES and AuraSource

0.0

Correlation Coefficient

AES  AuraSource

Pay attention - limited upside

The 3 months correlation between AES and AuraSource is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding The AES and AuraSource in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AuraSource and AES 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 The AES are associated (or correlated) with AuraSource. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AuraSource has no effect on the direction of AES i.e., AES and AuraSource go up and down completely randomly.

Pair Corralation between AES and AuraSource

If you would invest  1,245  in The AES on December 29, 2024 and sell it today you would lose (4.00) from holding The AES or give up 0.32% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	95.31%
Values	Daily Returns

The AES  vs.  AuraSource

AES

Risk-Adjusted Performance

Very Weak

Over the last 90 days The AES has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable technical and fundamental indicators, AES is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

AuraSource

Risk-Adjusted Performance

Very Weak

Over the last 90 days AuraSource has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, AuraSource is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with AES and AuraSource

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

The idea behind The AES and AuraSource 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..