Correlation Between Aura Investments and Homebiogas
Can any of the company-specific risk be diversified away by investing in both Aura Investments and Homebiogas 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 Homebiogas into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aura Investments and Homebiogas, you can compare the effects of market volatilities on Aura Investments and Homebiogas 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 Homebiogas. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aura Investments and Homebiogas.
Diversification Opportunities for Aura Investments and Homebiogas
-0.85 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Aura and Homebiogas is -0.85. Overlapping area represents the amount of risk that can be diversified away by holding Aura Investments and Homebiogas in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Homebiogas 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 Homebiogas. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Homebiogas has no effect on the direction of Aura Investments i.e., Aura Investments and Homebiogas go up and down completely randomly.
Pair Corralation between Aura Investments and Homebiogas
Assuming the 90 days trading horizon Aura Investments is expected to generate 0.97 times more return on investment than Homebiogas. However, Aura Investments is 1.03 times less risky than Homebiogas. It trades about 0.16 of its potential returns per unit of risk. Homebiogas is currently generating about -0.53 per unit of risk. If you would invest 127,980 in Aura Investments on August 29, 2024 and sell it today you would earn a total of 56,020 from holding Aura Investments or generate 43.77% 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. Homebiogas
Performance |
| Timeline |
| Aura Investments |
| Homebiogas |
Aura Investments and Homebiogas Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aura Investments and Homebiogas
The main advantage of trading using opposite Aura Investments and Homebiogas positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aura Investments position performs unexpectedly, Homebiogas 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 Homebiogas will offset losses from the drop in Homebiogas' long position.| Aura Investments vs. Israel Canada | Aura Investments vs. Azrieli Group | Aura Investments vs. Delek Group | Aura Investments vs. Israel Discount Bank |
| Homebiogas vs. Amot Investments | Homebiogas vs. Aura Investments | Homebiogas vs. Computer Direct | Homebiogas vs. YD More Investments |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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