Correlation Between Aurora Innovation and Formula Systems

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

By analyzing existing cross correlation between Aurora Innovation and Formula Systems 1985, you can compare the effects of market volatilities on Aurora Innovation and Formula Systems 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 Formula Systems. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aurora Innovation and Formula Systems.

Diversification Opportunities for Aurora Innovation and Formula Systems

-0.41

Correlation Coefficient

Aurora Innovation  Formula Systems

Very good diversification

The 3 months correlation between Aurora and Formula is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Aurora Innovation and Formula Systems 1985 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Formula Systems 1985 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 Formula Systems. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Formula Systems 1985 has no effect on the direction of Aurora Innovation i.e., Aurora Innovation and Formula Systems go up and down completely randomly.

Pair Corralation between Aurora Innovation and Formula Systems

Assuming the 90 days horizon Aurora Innovation is expected to under-perform the Formula Systems. In addition to that, Aurora Innovation is 2.63 times more volatile than Formula Systems 1985. It trades about -0.15 of its total potential returns per unit of risk. Formula Systems 1985 is currently generating about -0.01 per unit of volatility. If you would invest  14,151  in Formula Systems 1985 on August 6, 2025 and sell it today you would lose (151.00) from holding Formula Systems 1985 or give up 1.07% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	61.9%
Values	Daily Returns

Aurora Innovation  vs.  Formula Systems 1985

Aurora Innovation

Risk-Adjusted Performance

Weakest

Over the last 90 days Aurora Innovation has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fragile performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in December 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Formula Systems 1985

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Formula Systems 1985 are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of fairly uncertain basic indicators, Formula Systems showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Aurora Innovation and Formula Systems

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

The idea behind Aurora Innovation and Formula Systems 1985 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.