Correlation Between Otonomo Technologies and Aurora Innovation

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

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

Diversification Opportunities for Otonomo Technologies and Aurora Innovation

0.0

Correlation Coefficient

Otonomo Technologies  Aurora Innovation

Pay attention - limited upside

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

Pair Corralation between Otonomo Technologies and Aurora Innovation

If you would invest  135.00  in Aurora Innovation on December 20, 2024 and sell it today you would earn a total of  18.00  from holding Aurora Innovation or generate 13.33% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Otonomo Technologies  vs.  Aurora Innovation

Otonomo Technologies

Risk-Adjusted Performance

Very Weak

Over the last 90 days Otonomo Technologies has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Otonomo Technologies is not utilizing all of its potentials. The recent stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Aurora Innovation

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Aurora Innovation are ranked lower than 5 (%) 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.

Pair Trading with Otonomo Technologies and Aurora Innovation

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

The idea behind Otonomo Technologies and Aurora Innovation 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.