Correlation Between Plant Advanced and Aures Technologies

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

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

Diversification Opportunities for Plant Advanced and Aures Technologies

-0.57

Correlation Coefficient

Plant Advanced  Aures Technologies

Excellent diversification

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

Pair Corralation between Plant Advanced and Aures Technologies

Assuming the 90 days trading horizon Plant Advanced is expected to generate 3.24 times less return on investment than Aures Technologies. But when comparing it to its historical volatility, Plant Advanced Technologies is 2.14 times less risky than Aures Technologies. It trades about 0.01 of its potential returns per unit of risk. Aures Technologies SA is currently generating about 0.02 of returns per unit of risk over similar time horizon. 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 Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Plant Advanced Technologies  vs.  Aures Technologies SA

Plant Advanced Techn

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Plant Advanced Technologies has generated negative risk-adjusted returns adding no value to investors with long positions. Even with weak performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in February 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

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.

Pair Trading with Plant Advanced and Aures Technologies

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

The idea behind Plant Advanced Technologies and Aures Technologies 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.