Correlation Between Eguana Technologies and Aurora Solar
Can any of the company-specific risk be diversified away by investing in both Eguana Technologies and Aurora Solar 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 Eguana Technologies and Aurora Solar into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Eguana Technologies and Aurora Solar Technologies, you can compare the effects of market volatilities on Eguana Technologies and Aurora Solar 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 Eguana Technologies with a short position of Aurora Solar. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eguana Technologies and Aurora Solar.
Diversification Opportunities for Eguana Technologies and Aurora Solar
-0.16 | Correlation Coefficient |
Good diversification
The 3 months correlation between Eguana and Aurora is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding Eguana Technologies and Aurora Solar Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aurora Solar Technologies and Eguana Technologies 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 Eguana Technologies are associated (or correlated) with Aurora Solar. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aurora Solar Technologies has no effect on the direction of Eguana Technologies i.e., Eguana Technologies and Aurora Solar go up and down completely randomly.
Pair Corralation between Eguana Technologies and Aurora Solar
Assuming the 90 days horizon Eguana Technologies is expected to generate 3.33 times more return on investment than Aurora Solar. However, Eguana Technologies is 3.33 times more volatile than Aurora Solar Technologies. It trades about 0.17 of its potential returns per unit of risk. Aurora Solar Technologies is currently generating about 0.03 per unit of risk. If you would invest 1.00 in Eguana Technologies on December 29, 2024 and sell it today you would earn a total of 0.00 from holding Eguana Technologies or generate 0.0% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Eguana Technologies vs. Aurora Solar Technologies
Performance |
Timeline |
Eguana Technologies |
Aurora Solar Technologies |
Eguana Technologies and Aurora Solar Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Eguana Technologies and Aurora Solar
The main advantage of trading using opposite Eguana Technologies and Aurora Solar positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eguana Technologies position performs unexpectedly, Aurora Solar 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 Solar will offset losses from the drop in Aurora Solar's long position.Eguana Technologies vs. Aurora Solar Technologies | Eguana Technologies vs. Thermal Energy International |
Aurora Solar vs. Solar Alliance Energy | Aurora Solar vs. Lite Access Technologies | Aurora Solar vs. Braille Energy Systems |
Check out your portfolio center.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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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