Correlation Between Ecoloclean Industrs and Aurora Acquisition

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

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

Diversification Opportunities for Ecoloclean Industrs and Aurora Acquisition

0.0

Correlation Coefficient

Ecoloclean Industrs  Aurora Acquisition

Pay attention - limited upside

The 3 months correlation between Ecoloclean and Aurora is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Ecoloclean Industrs and Aurora Acquisition Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aurora Acquisition Corp and Ecoloclean Industrs 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 Ecoloclean Industrs are associated (or correlated) with Aurora Acquisition. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aurora Acquisition Corp has no effect on the direction of Ecoloclean Industrs i.e., Ecoloclean Industrs and Aurora Acquisition go up and down completely randomly.

Pair Corralation between Ecoloclean Industrs and Aurora Acquisition

Given the investment horizon of 90 days Ecoloclean Industrs is expected to generate 54.41 times more return on investment than Aurora Acquisition. However, Ecoloclean Industrs is 54.41 times more volatile than Aurora Acquisition Corp. It trades about 0.04 of its potential returns per unit of risk. Aurora Acquisition Corp is currently generating about 0.07 per unit of risk. If you would invest  0.01  in Ecoloclean Industrs on October 4, 2024 and sell it today you would lose (0.01) from holding Ecoloclean Industrs or give up 90.0% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	26.46%
Values	Daily Returns

Ecoloclean Industrs  vs.  Aurora Acquisition Corp

Ecoloclean Industrs

Risk-Adjusted Performance

10 of 100

OK

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

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.

Pair Trading with Ecoloclean Industrs and Aurora Acquisition

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

The idea behind Ecoloclean Industrs and Aurora Acquisition Corp 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.