Correlation Between OverActive Media and Aurora Spine

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

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

Diversification Opportunities for OverActive Media and Aurora Spine

-0.16

Correlation Coefficient

OverActive Media  Aurora Spine

Good diversification

The 3 months correlation between OverActive and Aurora is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding OverActive Media Corp and Aurora Spine in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aurora Spine and OverActive Media 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 OverActive Media Corp are associated (or correlated) with Aurora Spine. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aurora Spine has no effect on the direction of OverActive Media i.e., OverActive Media and Aurora Spine go up and down completely randomly.

Pair Corralation between OverActive Media and Aurora Spine

Assuming the 90 days horizon OverActive Media Corp is expected to generate 2.11 times more return on investment than Aurora Spine. However, OverActive Media is 2.11 times more volatile than Aurora Spine. It trades about 0.12 of its potential returns per unit of risk. Aurora Spine is currently generating about -0.02 per unit of risk. If you would invest  20.00  in OverActive Media Corp on May 26, 2025 and sell it today you would earn a total of  10.00  from holding OverActive Media Corp or generate 50.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.44%
Values	Daily Returns

OverActive Media Corp  vs.  Aurora Spine

OverActive Media Corp

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in OverActive Media Corp are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile fundamental indicators, OverActive Media reported solid returns over the last few months and may actually be approaching a breakup point.

Aurora Spine

Risk-Adjusted Performance

Weakest

Over the last 90 days Aurora Spine has generated negative risk-adjusted returns adding no value to investors with long positions. 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.

Pair Trading with OverActive Media and Aurora Spine

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

The idea behind OverActive Media Corp and Aurora Spine 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.