Correlation Between Aurora Innovation and PWUP Old

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

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

Diversification Opportunities for Aurora Innovation and PWUP Old

-0.13

Correlation Coefficient

Aurora Innovation  PWUP Old

Good diversification

The 3 months correlation between Aurora and PWUP is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Aurora Innovation and PWUP Old in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PWUP Old 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 PWUP Old. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PWUP Old has no effect on the direction of Aurora Innovation i.e., Aurora Innovation and PWUP Old go up and down completely randomly.

Pair Corralation between Aurora Innovation and PWUP Old

Assuming the 90 days horizon Aurora Innovation is expected to generate 2.23 times more return on investment than PWUP Old. However, Aurora Innovation is 2.23 times more volatile than PWUP Old. It trades about 0.1 of its potential returns per unit of risk. PWUP Old is currently generating about -0.04 per unit of risk. If you would invest  112.00  in Aurora Innovation on December 29, 2024 and sell it today you would earn a total of  59.00  from holding Aurora Innovation or generate 52.68% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	57.38%
Values	Daily Returns

Aurora Innovation  vs.  PWUP Old

Aurora Innovation

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Aurora Innovation are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Aurora Innovation showed solid returns over the last few months and may actually be approaching a breakup point.

PWUP Old

Risk-Adjusted Performance

Very Weak

Over the last 90 days PWUP Old has generated negative risk-adjusted returns adding no value to investors with long positions. Even with fragile performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in April 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Pair Trading with Aurora Innovation and PWUP Old

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

The idea behind Aurora Innovation and PWUP Old 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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.