Correlation Between Aurora Solar and Solar Alliance
Can any of the company-specific risk be diversified away by investing in both Aurora Solar and Solar Alliance 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 Solar and Solar Alliance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aurora Solar Technologies and Solar Alliance Energy, you can compare the effects of market volatilities on Aurora Solar and Solar Alliance 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 Solar with a short position of Solar Alliance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aurora Solar and Solar Alliance.
Diversification Opportunities for Aurora Solar and Solar Alliance
-0.08 | Correlation Coefficient |
Good diversification
The 3 months correlation between Aurora and Solar is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Aurora Solar Technologies and Solar Alliance Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Solar Alliance Energy and Aurora Solar 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 Solar Technologies are associated (or correlated) with Solar Alliance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Solar Alliance Energy has no effect on the direction of Aurora Solar i.e., Aurora Solar and Solar Alliance go up and down completely randomly.
Pair Corralation between Aurora Solar and Solar Alliance
Assuming the 90 days horizon Aurora Solar Technologies is expected to generate 1.13 times more return on investment than Solar Alliance. However, Aurora Solar is 1.13 times more volatile than Solar Alliance Energy. It trades about 0.11 of its potential returns per unit of risk. Solar Alliance Energy is currently generating about 0.09 per unit of risk. If you would invest 1.50 in Aurora Solar Technologies on August 25, 2025 and sell it today you would earn a total of 0.00 from holding Aurora Solar Technologies or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aurora Solar Technologies vs. Solar Alliance Energy
Performance |
| Timeline |
| Aurora Solar Technologies |
| Solar Alliance Energy |
Aurora Solar and Solar Alliance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aurora Solar and Solar Alliance
The main advantage of trading using opposite Aurora Solar and Solar Alliance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aurora Solar position performs unexpectedly, Solar Alliance 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 Solar Alliance will offset losses from the drop in Solar Alliance's long position.| Aurora Solar vs. Clear Blue Technologies | Aurora Solar vs. International Frontier Resources | Aurora Solar vs. Solar Alliance Energy | Aurora Solar vs. WesCan Energy Corp |
| Solar Alliance vs. Aurora Solar Technologies | Solar Alliance vs. Clear Blue Technologies | Solar Alliance vs. Bengal Energy | Solar Alliance vs. Metalore Resources |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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