Correlation Between Aurora Investment and Picton Property

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

Diversification Opportunities for Aurora Investment and Picton Property

0.63

Correlation Coefficient

Aurora Investment  Picton Property

Poor diversification

The 3 months correlation between Aurora and Picton is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Aurora Investment Trust and Picton Property Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Picton Property Income 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 Picton Property. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Picton Property Income has no effect on the direction of Aurora Investment i.e., Aurora Investment and Picton Property go up and down completely randomly.

Pair Corralation between Aurora Investment and Picton Property

Assuming the 90 days trading horizon Aurora Investment is expected to generate 1.53 times less return on investment than Picton Property. In addition to that, Aurora Investment is 1.05 times more volatile than Picton Property Income. It trades about 0.1 of its total potential returns per unit of risk. Picton Property Income is currently generating about 0.16 per unit of volatility. If you would invest  7,314  in Picton Property Income on April 24, 2025 and sell it today you would earn a total of  686.00  from holding Picton Property Income or generate 9.38% 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.  Picton Property Income

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 latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Picton Property Income

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Picton Property Income are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady basic indicators, Picton Property may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with Aurora Investment and Picton Property

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

The idea behind Aurora Investment Trust and Picton Property Income 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.