Correlation Between Aura Investments and Amanet Management

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Can any of the company-specific risk be diversified away by investing in both Aura Investments and Amanet Management 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 Aura Investments and Amanet Management into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aura Investments and Amanet Management Systems, you can compare the effects of market volatilities on Aura Investments and Amanet Management 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 Aura Investments with a short position of Amanet Management. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aura Investments and Amanet Management.

Diversification Opportunities for Aura Investments and Amanet Management

0.56
  Correlation Coefficient

Very weak diversification

The 3 months correlation between Aura and Amanet is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Aura Investments and Amanet Management Systems in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amanet Management Systems and Aura Investments 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 Aura Investments are associated (or correlated) with Amanet Management. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amanet Management Systems has no effect on the direction of Aura Investments i.e., Aura Investments and Amanet Management go up and down completely randomly.

Pair Corralation between Aura Investments and Amanet Management

Assuming the 90 days trading horizon Aura Investments is expected to under-perform the Amanet Management. In addition to that, Aura Investments is 1.2 times more volatile than Amanet Management Systems. It trades about -0.07 of its total potential returns per unit of risk. Amanet Management Systems is currently generating about 0.2 per unit of volatility. If you would invest  155,900  in Amanet Management Systems on August 31, 2024 and sell it today you would earn a total of  8,500  from holding Amanet Management Systems or generate 5.45% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

Aura Investments  vs.  Amanet Management Systems

 Performance 
       Timeline  
Aura Investments 

Risk-Adjusted Performance

9 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in Aura Investments are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Aura Investments sustained solid returns over the last few months and may actually be approaching a breakup point.
Amanet Management Systems 

Risk-Adjusted Performance

5 of 100

 
Weak
 
Strong
Modest
Compared to the overall equity markets, risk-adjusted returns on investments in Amanet Management Systems are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Amanet Management may actually be approaching a critical reversion point that can send shares even higher in December 2024.

Aura Investments and Amanet Management Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Aura Investments and Amanet Management

The main advantage of trading using opposite Aura Investments and Amanet Management positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aura Investments position performs unexpectedly, Amanet Management 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 Amanet Management will offset losses from the drop in Amanet Management's long position.
The idea behind Aura Investments and Amanet Management Systems 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.

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