Correlation Between Aurora Technology and Bleuacacia

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

Diversification Opportunities for Aurora Technology and Bleuacacia

0.04

Correlation Coefficient

Aurora Technology  Bleuacacia

Significant diversification

The 3 months correlation between Aurora and Bleuacacia is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Aurora Technology Acquisition and Bleuacacia Ltd Rights in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bleuacacia Rights 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 Bleuacacia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bleuacacia Rights has no effect on the direction of Aurora Technology i.e., Aurora Technology and Bleuacacia go up and down completely randomly.

Pair Corralation between Aurora Technology and Bleuacacia

If you would invest  1.19  in Bleuacacia Ltd Rights on October 25, 2024 and sell it today you would lose (0.34) from holding Bleuacacia Ltd Rights or give up 28.57% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	4.76%
Values	Daily Returns

Aurora Technology Acquisition  vs.  Bleuacacia Ltd Rights

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.

Bleuacacia Rights

Risk-Adjusted Performance

0 of 100

Good

Over the last 90 days Bleuacacia Ltd Rights has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively abnormal basic indicators, Bleuacacia reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Aurora Technology and Bleuacacia

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

The idea behind Aurora Technology Acquisition and Bleuacacia Ltd Rights 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.