Correlation Between Aurora Innovation and Computer Task

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

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

Diversification Opportunities for Aurora Innovation and Computer Task

0.74

Correlation Coefficient

Aurora Innovation  Computer Task

Poor diversification

The 3 months correlation between Aurora and Computer is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Aurora Innovation and Computer Task Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Computer Task Group and Aurora Innovation 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 Innovation are associated (or correlated) with Computer Task. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Computer Task Group has no effect on the direction of Aurora Innovation i.e., Aurora Innovation and Computer Task go up and down completely randomly.

Pair Corralation between Aurora Innovation and Computer Task

If you would invest  768.00  in Computer Task Group on August 16, 2024 and sell it today you would earn a total of  0.00  from holding Computer Task Group or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	4.55%
Values	Daily Returns

Aurora Innovation  vs.  Computer Task Group

Aurora Innovation

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Aurora Innovation are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Even with relatively unsteady basic indicators, Aurora Innovation reported solid returns over the last few months and may actually be approaching a breakup point.

Computer Task Group

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Computer Task Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Computer Task is not utilizing all of its potentials. The newest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Aurora Innovation and Computer Task

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

The idea behind Aurora Innovation and Computer Task 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.

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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.