Correlation Between Crosswood and Aures Technologies

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

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

Diversification Opportunities for Crosswood and Aures Technologies

0.73

Correlation Coefficient

Crosswood  Aures Technologies

Poor diversification

The 3 months correlation between Crosswood and Aures is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Crosswood and Aures Technologies SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aures Technologies and Crosswood 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 Crosswood are associated (or correlated) with Aures Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aures Technologies has no effect on the direction of Crosswood i.e., Crosswood and Aures Technologies go up and down completely randomly.

Pair Corralation between Crosswood and Aures Technologies

Assuming the 90 days trading horizon Crosswood is expected to generate 8.13 times more return on investment than Aures Technologies. However, Crosswood is 8.13 times more volatile than Aures Technologies SA. It trades about 0.11 of its potential returns per unit of risk. Aures Technologies SA is currently generating about 0.04 per unit of risk. If you would invest  995.00  in Crosswood on December 22, 2024 and sell it today you would earn a total of  95.00  from holding Crosswood or generate 9.55% return on investment over 90 days.

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

Crosswood  vs.  Aures Technologies SA

Crosswood

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Crosswood are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Crosswood may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Aures Technologies

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Aures Technologies SA are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable basic indicators, Aures Technologies is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Crosswood and Aures Technologies

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

The idea behind Crosswood and Aures Technologies SA 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.