Correlation Between Aura FAT and Aimfinity Investment

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

By analyzing existing cross correlation between Aura FAT Projects and Aimfinity Investment I, you can compare the effects of market volatilities on Aura FAT and Aimfinity Investment 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 Aura FAT with a short position of Aimfinity Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aura FAT and Aimfinity Investment.

Diversification Opportunities for Aura FAT and Aimfinity Investment

0.23

Correlation Coefficient

Aura FAT  Aimfinity Investment

Modest diversification

The 3 months correlation between Aura and Aimfinity is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Aura FAT Projects and Aimfinity Investment I in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aimfinity Investment and Aura FAT 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 Aura FAT Projects are associated (or correlated) with Aimfinity Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aimfinity Investment has no effect on the direction of Aura FAT i.e., Aura FAT and Aimfinity Investment go up and down completely randomly.

Pair Corralation between Aura FAT and Aimfinity Investment

If you would invest  1,166  in Aimfinity Investment I on September 4, 2024 and sell it today you would earn a total of  24.00  from holding Aimfinity Investment I or generate 2.06% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	9.38%
Values	Daily Returns

Aura FAT Projects  vs.  Aimfinity Investment I

Aura FAT Projects

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Aura FAT Projects has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Aura FAT is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Aimfinity Investment

Risk-Adjusted Performance

7 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Aimfinity Investment I are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Aimfinity Investment is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Aura FAT and Aimfinity Investment

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

The idea behind Aura FAT Projects and Aimfinity Investment I 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.