Correlation Between Aura Investments and Cannabotech
Can any of the company-specific risk be diversified away by investing in both Aura Investments and Cannabotech 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 Cannabotech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aura Investments and Cannabotech, you can compare the effects of market volatilities on Aura Investments and Cannabotech 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 Cannabotech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aura Investments and Cannabotech.
Diversification Opportunities for Aura Investments and Cannabotech
-0.82 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Aura and Cannabotech is -0.82. Overlapping area represents the amount of risk that can be diversified away by holding Aura Investments and Cannabotech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cannabotech 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 Cannabotech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cannabotech has no effect on the direction of Aura Investments i.e., Aura Investments and Cannabotech go up and down completely randomly.
Pair Corralation between Aura Investments and Cannabotech
Assuming the 90 days trading horizon Aura Investments is expected to generate 0.17 times more return on investment than Cannabotech. However, Aura Investments is 6.02 times less risky than Cannabotech. It trades about 0.08 of its potential returns per unit of risk. Cannabotech is currently generating about -0.02 per unit of risk. If you would invest 151,626 in Aura Investments on September 3, 2024 and sell it today you would earn a total of 32,574 from holding Aura Investments or generate 21.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aura Investments vs. Cannabotech
Performance |
| Timeline |
| Aura Investments |
| Cannabotech |
Aura Investments and Cannabotech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aura Investments and Cannabotech
The main advantage of trading using opposite Aura Investments and Cannabotech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aura Investments position performs unexpectedly, Cannabotech 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 Cannabotech will offset losses from the drop in Cannabotech's long position.| Aura Investments vs. Israel Canada | Aura Investments vs. Azrieli Group | Aura Investments vs. Delek Group | Aura Investments vs. Shikun Binui |
| Cannabotech vs. Israel China Biotechnology | Cannabotech vs. Clal Insurance Enterprises | Cannabotech vs. One Software Technologies | Cannabotech vs. Sarine Technologies |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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