Correlation Between AurosTechnology and CU Tech

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

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

Diversification Opportunities for AurosTechnology and CU Tech

-0.42

Correlation Coefficient

AurosTechnology  CU Tech

Very good diversification

The 3 months correlation between AurosTechnology and 376290 is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding AurosTechnology and CU Tech Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CU Tech Corp and AurosTechnology 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 AurosTechnology are associated (or correlated) with CU Tech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CU Tech Corp has no effect on the direction of AurosTechnology i.e., AurosTechnology and CU Tech go up and down completely randomly.

Pair Corralation between AurosTechnology and CU Tech

Assuming the 90 days trading horizon AurosTechnology is expected to under-perform the CU Tech. In addition to that, AurosTechnology is 1.64 times more volatile than CU Tech Corp. It trades about -0.21 of its total potential returns per unit of risk. CU Tech Corp is currently generating about 0.4 per unit of volatility. If you would invest  331,000  in CU Tech Corp on March 4, 2024 and sell it today you would earn a total of  64,500  from holding CU Tech Corp or generate 19.49% return on investment over 90 days.

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

AurosTechnology  vs.  CU Tech Corp

AurosTechnology

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days AurosTechnology has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in July 2024. The current disturbance may also be a sign of long term up-swing for the company investors.

CU Tech Corp

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in CU Tech Corp are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, CU Tech sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with AurosTechnology and CU Tech

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

The idea behind AurosTechnology and CU Tech 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.