Correlation Between Aurora Acquisition and Newell Brands

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

Diversification Opportunities for Aurora Acquisition and Newell Brands

0.86

Correlation Coefficient

Aurora Acquisition  Newell Brands

Very poor diversification

The 3 months correlation between Aurora and Newell is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Aurora Acquisition Corp and Newell Brands in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Newell Brands 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 Newell Brands. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Newell Brands has no effect on the direction of Aurora Acquisition i.e., Aurora Acquisition and Newell Brands go up and down completely randomly.

Pair Corralation between Aurora Acquisition and Newell Brands

If you would invest  606.00  in Newell Brands on October 4, 2024 and sell it today you would earn a total of  392.00  from holding Newell Brands or generate 64.69% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	0.79%
Values	Daily Returns

Aurora Acquisition Corp  vs.  Newell Brands

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 comparatively stable fundamental indicators, Aurora Acquisition is not utilizing all of its potentials. The recent stock price uproar, may contribute to short-horizon losses for the private investors.

Newell Brands

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Newell Brands are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite quite weak basic indicators, Newell Brands disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Aurora Acquisition and Newell Brands

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

The idea behind Aurora Acquisition Corp and Newell Brands 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.