Correlation Between Aurora Investment and Catalyst Media

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

Diversification Opportunities for Aurora Investment and Catalyst Media

-0.03

Correlation Coefficient

Aurora Investment  Catalyst Media

Good diversification

The 3 months correlation between Aurora and Catalyst is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Aurora Investment Trust and Catalyst Media Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Catalyst Media Group 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 Catalyst Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Catalyst Media Group has no effect on the direction of Aurora Investment i.e., Aurora Investment and Catalyst Media go up and down completely randomly.

Pair Corralation between Aurora Investment and Catalyst Media

Assuming the 90 days trading horizon Aurora Investment Trust is expected to generate 0.45 times more return on investment than Catalyst Media. However, Aurora Investment Trust is 2.22 times less risky than Catalyst Media. It trades about 0.06 of its potential returns per unit of risk. Catalyst Media Group is currently generating about -0.21 per unit of risk. If you would invest  23,150  in Aurora Investment Trust on November 20, 2024 and sell it today you would earn a total of  950.00  from holding Aurora Investment Trust or generate 4.1% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Aurora Investment Trust  vs.  Catalyst Media Group

Aurora Investment Trust

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Aurora Investment Trust are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound technical and fundamental indicators, Aurora Investment is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Catalyst Media Group

Risk-Adjusted Performance

Very Weak

Over the last 90 days Catalyst Media Group has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's technical and fundamental indicators remain rather sound which may send shares a bit higher in March 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with Aurora Investment and Catalyst Media

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

The idea behind Aurora Investment Trust and Catalyst Media 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.