Correlation Between Aura Investments and Israel Canada
Can any of the company-specific risk be diversified away by investing in both Aura Investments and Israel Canada 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 Israel Canada into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aura Investments and Israel Canada, you can compare the effects of market volatilities on Aura Investments and Israel Canada 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 Israel Canada. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aura Investments and Israel Canada.
Diversification Opportunities for Aura Investments and Israel Canada
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Aura and Israel is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Aura Investments and Israel Canada in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Israel Canada 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 Israel Canada. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Israel Canada has no effect on the direction of Aura Investments i.e., Aura Investments and Israel Canada go up and down completely randomly.
Pair Corralation between Aura Investments and Israel Canada
Assuming the 90 days trading horizon Aura Investments is expected to generate 0.94 times more return on investment than Israel Canada. However, Aura Investments is 1.07 times less risky than Israel Canada. It trades about 0.12 of its potential returns per unit of risk. Israel Canada is currently generating about 0.04 per unit of risk. If you would invest 128,833 in Aura Investments on August 25, 2024 and sell it today you would earn a total of 58,367 from holding Aura Investments or generate 45.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.29% |
| Values | Daily Returns |
Aura Investments vs. Israel Canada
Performance |
| Timeline |
| Aura Investments |
| Israel Canada |
Aura Investments and Israel Canada Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aura Investments and Israel Canada
The main advantage of trading using opposite Aura Investments and Israel Canada positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aura Investments position performs unexpectedly, Israel Canada 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 Israel Canada will offset losses from the drop in Israel Canada's long position.| Aura Investments vs. Israel Canada | Aura Investments vs. Azrieli Group | Aura Investments vs. Delek Group | Aura Investments vs. Shikun Binui |
| Israel Canada vs. Azrieli Group | Israel Canada vs. Shikun Binui | Israel Canada vs. Ashtrom Group | Israel Canada vs. Enlight Renewable Energy |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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