Correlation Between Aurora Spine and EDAP TMS

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

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

Diversification Opportunities for Aurora Spine and EDAP TMS

-0.44

Correlation Coefficient

Aurora Spine  EDAP TMS

Very good diversification

The 3 months correlation between Aurora and EDAP is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Aurora Spine and EDAP TMS SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EDAP TMS SA and Aurora Spine 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 Spine are associated (or correlated) with EDAP TMS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EDAP TMS SA has no effect on the direction of Aurora Spine i.e., Aurora Spine and EDAP TMS go up and down completely randomly.

Pair Corralation between Aurora Spine and EDAP TMS

Assuming the 90 days horizon Aurora Spine is expected to generate 1.04 times more return on investment than EDAP TMS. However, Aurora Spine is 1.04 times more volatile than EDAP TMS SA. It trades about 0.02 of its potential returns per unit of risk. EDAP TMS SA is currently generating about -0.21 per unit of risk. If you would invest  22.00  in Aurora Spine on May 14, 2025 and sell it today you would earn a total of  0.00  from holding Aurora Spine or generate 0.0% return on investment over 90 days.

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

Aurora Spine  vs.  EDAP TMS SA

Aurora Spine

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Aurora Spine are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, Aurora Spine is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

EDAP TMS SA

Risk-Adjusted Performance

Weakest

Over the last 90 days EDAP TMS SA has generated negative risk-adjusted returns adding no value to investors with long positions. Even with inconsistent performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in September 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Pair Trading with Aurora Spine and EDAP TMS

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

The idea behind Aurora Spine and EDAP TMS SA 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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.