Correlation Between Aurora Technology and A SPAC

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

By analyzing existing cross correlation between Aurora Technology Acquisition and A SPAC I, you can compare the effects of market volatilities on Aurora Technology and A SPAC 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 Technology with a short position of A SPAC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aurora Technology and A SPAC.

Diversification Opportunities for Aurora Technology and A SPAC

0.0

Correlation Coefficient

Aurora Technology  A SPAC

Pay attention - limited upside

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

Pair Corralation between Aurora Technology and A SPAC

If you would invest  17.00  in A SPAC I on October 10, 2024 and sell it today you would earn a total of  0.00  from holding A SPAC I or generate 0.0% return on investment over 90 days.

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

Aurora Technology Acquisition  vs.  A SPAC I

Aurora Technology

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Aurora Technology Acquisition has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable forward-looking signals, Aurora Technology is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

A SPAC I

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days A SPAC I has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, A SPAC 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 Aurora Technology and A SPAC

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

The idea behind Aurora Technology Acquisition and A SPAC I 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.