Correlation Between Veea and Aurora Innovation

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

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

Diversification Opportunities for Veea and Aurora Innovation

-0.32

Correlation Coefficient

Veea  Aurora Innovation

Very good diversification

The 3 months correlation between Veea and Aurora is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Veea Inc and Aurora Innovation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aurora Innovation and Veea 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 Veea Inc 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 Veea i.e., Veea and Aurora Innovation go up and down completely randomly.

Pair Corralation between Veea and Aurora Innovation

Given the investment horizon of 90 days Veea Inc is expected to generate 1.06 times more return on investment than Aurora Innovation. However, Veea is 1.06 times more volatile than Aurora Innovation. It trades about 0.31 of its potential returns per unit of risk. Aurora Innovation is currently generating about 0.11 per unit of risk. If you would invest  250.00  in Veea Inc on September 24, 2024 and sell it today you would earn a total of  129.00  from holding Veea Inc or generate 51.6% return on investment over 90 days.

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

Veea Inc  vs.  Aurora Innovation

Veea Inc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Veea Inc has generated negative risk-adjusted returns adding no value to investors with long positions. Despite inconsistent performance in the last few months, the Stock's technical and fundamental indicators remain somewhat strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Aurora Innovation

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Aurora Innovation are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Even with relatively unsteady basic indicators, Aurora Innovation reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Veea and Aurora Innovation

The main advantage of trading using opposite Veea and Aurora Innovation positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Veea 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 Veea Inc 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.

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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.