Correlation Between Aures Technologies and Netmedia Group

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

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

Diversification Opportunities for Aures Technologies and Netmedia Group

0.2

Correlation Coefficient

Aures Technologies  Netmedia Group

Modest diversification

The 3 months correlation between Aures and Netmedia is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Aures Technologies SA and Netmedia Group SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Netmedia Group SA and Aures Technologies 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 Aures Technologies SA are associated (or correlated) with Netmedia Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Netmedia Group SA has no effect on the direction of Aures Technologies i.e., Aures Technologies and Netmedia Group go up and down completely randomly.

Pair Corralation between Aures Technologies and Netmedia Group

Assuming the 90 days trading horizon Aures Technologies SA is expected to generate 1.64 times more return on investment than Netmedia Group. However, Aures Technologies is 1.64 times more volatile than Netmedia Group SA. It trades about 0.02 of its potential returns per unit of risk. Netmedia Group SA is currently generating about -0.04 per unit of risk. If you would invest  896.00  in Aures Technologies SA on October 11, 2024 and sell it today you would lose (271.00) from holding Aures Technologies SA or give up 30.25% of portfolio value over 90 days.

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

Aures Technologies SA  vs.  Netmedia Group SA

Aures Technologies

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Aures Technologies SA are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable basic indicators, Aures Technologies is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Netmedia Group SA

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Netmedia Group SA are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Netmedia Group may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Aures Technologies and Netmedia Group

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

The idea behind Aures Technologies SA and Netmedia Group SA 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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.