Correlation Between Aurora Innovation and Alithya

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

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

Diversification Opportunities for Aurora Innovation and Alithya

-0.19

Correlation Coefficient

Aurora Innovation  Alithya

Good diversification

The 3 months correlation between Aurora and Alithya is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Aurora Innovation and Alithya Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alithya Group and Aurora Innovation 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 Innovation are associated (or correlated) with Alithya. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alithya Group has no effect on the direction of Aurora Innovation i.e., Aurora Innovation and Alithya go up and down completely randomly.

Pair Corralation between Aurora Innovation and Alithya

If you would invest  426.00  in Aurora Innovation on September 2, 2024 and sell it today you would earn a total of  221.00  from holding Aurora Innovation or generate 51.88% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	1.56%
Values	Daily Returns

Aurora Innovation  vs.  Alithya Group

Aurora Innovation

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Aurora Innovation are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Even with relatively unsteady basic indicators, Aurora Innovation reported solid returns over the last few months and may actually be approaching a breakup point.

Alithya Group

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Alithya Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Alithya is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Aurora Innovation and Alithya

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

The idea behind Aurora Innovation and Alithya 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.

Check out your portfolio center.

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 CEOs Directory module to screen CEOs from public companies around the world.