Correlation Between Aurora Investment and Amedeo Air

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Can any of the company-specific risk be diversified away by investing in both Aurora Investment and Amedeo Air 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 Aurora Investment and Amedeo Air into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aurora Investment Trust and Amedeo Air Four, you can compare the effects of market volatilities on Aurora Investment and Amedeo Air 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 Aurora Investment with a short position of Amedeo Air. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aurora Investment and Amedeo Air.

Diversification Opportunities for Aurora Investment and Amedeo Air

-0.84
  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between Aurora and Amedeo is -0.84. Overlapping area represents the amount of risk that can be diversified away by holding Aurora Investment Trust and Amedeo Air Four in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amedeo Air Four and Aurora Investment 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 Aurora Investment Trust are associated (or correlated) with Amedeo Air. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amedeo Air Four has no effect on the direction of Aurora Investment i.e., Aurora Investment and Amedeo Air go up and down completely randomly.

Pair Corralation between Aurora Investment and Amedeo Air

Assuming the 90 days trading horizon Aurora Investment Trust is expected to under-perform the Amedeo Air. In addition to that, Aurora Investment is 1.88 times more volatile than Amedeo Air Four. It trades about -0.08 of its total potential returns per unit of risk. Amedeo Air Four is currently generating about 0.5 per unit of volatility. If you would invest  5,000  in Amedeo Air Four on October 6, 2024 and sell it today you would earn a total of  700.00  from holding Amedeo Air Four or generate 14.0% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthSignificant
Accuracy100.0%
ValuesDaily Returns

Aurora Investment Trust  vs.  Amedeo Air Four

 Performance 
       Timeline  
Aurora Investment Trust 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Aurora Investment Trust has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's technical and fundamental indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.
Amedeo Air Four 

Risk-Adjusted Performance

27 of 100

 
Weak
 
Strong
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Amedeo Air Four are ranked lower than 27 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady technical and fundamental indicators, Amedeo Air exhibited solid returns over the last few months and may actually be approaching a breakup point.

Aurora Investment and Amedeo Air Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Aurora Investment and Amedeo Air

The main advantage of trading using opposite Aurora Investment and Amedeo Air positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aurora Investment position performs unexpectedly, Amedeo Air 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 Amedeo Air will offset losses from the drop in Amedeo Air's long position.
The idea behind Aurora Investment Trust and Amedeo Air Four 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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.

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