Correlation Between Guerrilla and Aeluma

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

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

Diversification Opportunities for Guerrilla and Aeluma

-0.29

Correlation Coefficient

Guerrilla  Aeluma

Very good diversification

The 3 months correlation between Guerrilla and Aeluma is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Guerrilla RF and Aeluma Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aeluma Inc and Guerrilla 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 Guerrilla RF are associated (or correlated) with Aeluma. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aeluma Inc has no effect on the direction of Guerrilla i.e., Guerrilla and Aeluma go up and down completely randomly.

Pair Corralation between Guerrilla and Aeluma

Given the investment horizon of 90 days Guerrilla RF is expected to under-perform the Aeluma. But the otc stock apears to be less risky and, when comparing its historical volatility, Guerrilla RF is 1.18 times less risky than Aeluma. The otc stock trades about -0.03 of its potential returns per unit of risk. The Aeluma Inc is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest  325.00  in Aeluma Inc on October 6, 2024 and sell it today you would earn a total of  446.00  from holding Aeluma Inc or generate 137.23% return on investment over 90 days.

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

Guerrilla RF  vs.  Aeluma Inc

Guerrilla RF

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Guerrilla RF 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 technical and fundamental indicators remain relatively invariable which may send shares a bit higher in February 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Aeluma Inc

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Aeluma Inc are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile primary indicators, Aeluma unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Guerrilla and Aeluma

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

The idea behind Guerrilla RF and Aeluma Inc 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.

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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.