Correlation Between Aurora Investment and Intuitive Investments

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

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

Diversification Opportunities for Aurora Investment and Intuitive Investments

0.79

Correlation Coefficient

Aurora Investment  Intuitive Investments

Poor diversification

The 3 months correlation between Aurora and Intuitive is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Aurora Investment Trust and Intuitive Investments Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Intuitive Investments and Aurora Investment 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 Aurora Investment Trust are associated (or correlated) with Intuitive Investments. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Intuitive Investments has no effect on the direction of Aurora Investment i.e., Aurora Investment and Intuitive Investments go up and down completely randomly.

Pair Corralation between Aurora Investment and Intuitive Investments

Assuming the 90 days trading horizon Aurora Investment Trust is expected to under-perform the Intuitive Investments. In addition to that, Aurora Investment is 1.1 times more volatile than Intuitive Investments Group. It trades about -0.13 of its total potential returns per unit of risk. Intuitive Investments Group is currently generating about -0.09 per unit of volatility. If you would invest  13,300  in Intuitive Investments Group on September 13, 2024 and sell it today you would lose (850.00) from holding Intuitive Investments Group or give up 6.39% of portfolio value over 90 days.

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

Aurora Investment Trust  vs.  Intuitive Investments Group

Aurora Investment Trust

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Aurora Investment Trust has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unsteady performance, the Stock's technical and fundamental indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Intuitive Investments

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Intuitive Investments Group has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound technical and fundamental indicators, Intuitive Investments is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Aurora Investment and Intuitive Investments

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

The idea behind Aurora Investment Trust and Intuitive Investments Group 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.