Correlation Between Aurora Investment and FC Investment

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

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

Diversification Opportunities for Aurora Investment and FC Investment

0.73

Correlation Coefficient

Aurora Investment  FC Investment

Poor diversification

The 3 months correlation between Aurora and FCIT is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Aurora Investment Trust and FC Investment Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FC Investment Trust and Aurora Investment 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 Investment Trust are associated (or correlated) with FC Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FC Investment Trust has no effect on the direction of Aurora Investment i.e., Aurora Investment and FC Investment go up and down completely randomly.

Pair Corralation between Aurora Investment and FC Investment

Assuming the 90 days trading horizon Aurora Investment is expected to generate 2.32 times less return on investment than FC Investment. In addition to that, Aurora Investment is 1.18 times more volatile than FC Investment Trust. It trades about 0.1 of its total potential returns per unit of risk. FC Investment Trust is currently generating about 0.27 per unit of volatility. If you would invest  99,861  in FC Investment Trust on April 22, 2025 and sell it today you would earn a total of  14,839  from holding FC Investment Trust or generate 14.86% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Aurora Investment Trust  vs.  FC Investment Trust

Aurora Investment Trust

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Aurora Investment Trust are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound technical and fundamental indicators, Aurora Investment is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

FC Investment Trust

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in FC Investment Trust are ranked lower than 21 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, FC Investment unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Aurora Investment and FC Investment

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

The idea behind Aurora Investment Trust and FC Investment Trust 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.