Correlation Between Aurora Solar and Clear Blue

Can any of the company-specific risk be diversified away by investing in both Aurora Solar and Clear Blue 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 Clear Blue 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 Clear Blue Technologies, you can compare the effects of market volatilities on Aurora Solar and Clear Blue 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 Clear Blue. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aurora Solar and Clear Blue.

Diversification Opportunities for Aurora Solar and Clear Blue

-0.07

Correlation Coefficient

Aurora Solar  Clear Blue

Good diversification

The 3 months correlation between Aurora and Clear is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding Aurora Solar Technologies and Clear Blue Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Clear Blue Technologies 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 Clear Blue. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Clear Blue Technologies has no effect on the direction of Aurora Solar i.e., Aurora Solar and Clear Blue go up and down completely randomly.

Pair Corralation between Aurora Solar and Clear Blue

Assuming the 90 days horizon Aurora Solar Technologies is expected to generate 1.93 times more return on investment than Clear Blue. However, Aurora Solar is 1.93 times more volatile than Clear Blue Technologies. It trades about 0.13 of its potential returns per unit of risk. Clear Blue Technologies is currently generating about 0.06 per unit of risk. If you would invest  1.50  in Aurora Solar Technologies on April 24, 2025 and sell it today you would earn a total of  0.50  from holding Aurora Solar Technologies or generate 33.33% 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.  Clear Blue Technologies

Aurora Solar Technologies

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Aurora Solar Technologies are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of fairly fragile basic indicators, Aurora Solar showed solid returns over the last few months and may actually be approaching a breakup point.

Clear Blue Technologies

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Clear Blue Technologies are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal essential indicators, Clear Blue showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Aurora Solar and Clear Blue

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

The idea behind Aurora Solar Technologies and Clear Blue Technologies 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.