Correlation Between Aurora Acquisition and Ault Disruptive

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

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

Diversification Opportunities for Aurora Acquisition and Ault Disruptive

-0.8

Correlation Coefficient

Aurora Acquisition  Ault Disruptive

Pay attention - limited upside

The 3 months correlation between Aurora and Ault is -0.8. Overlapping area represents the amount of risk that can be diversified away by holding Aurora Acquisition Corp and Ault Disruptive Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ault Disruptive Tech and Aurora Acquisition 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 Acquisition Corp are associated (or correlated) with Ault Disruptive. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ault Disruptive Tech has no effect on the direction of Aurora Acquisition i.e., Aurora Acquisition and Ault Disruptive go up and down completely randomly.

Pair Corralation between Aurora Acquisition and Ault Disruptive

If you would invest  1,140  in Ault Disruptive Technologies on September 20, 2024 and sell it today you would earn a total of  0.00  from holding Ault Disruptive Technologies or generate 0.0% return on investment over 90 days.

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

Aurora Acquisition Corp  vs.  Ault Disruptive Technologies

Aurora Acquisition Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Aurora Acquisition Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, Aurora Acquisition is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Ault Disruptive Tech

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Ault Disruptive Technologies has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Aurora Acquisition and Ault Disruptive

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

The idea behind Aurora Acquisition Corp and Ault Disruptive Technologies 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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.