Correlation Between Aura Investments and Multi Retail
Can any of the company-specific risk be diversified away by investing in both Aura Investments and Multi Retail 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 Multi Retail into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aura Investments and Multi Retail Group, you can compare the effects of market volatilities on Aura Investments and Multi Retail 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 Multi Retail. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aura Investments and Multi Retail.
Diversification Opportunities for Aura Investments and Multi Retail
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Aura and Multi is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Aura Investments and Multi Retail Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Multi Retail Group 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 Multi Retail. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Multi Retail Group has no effect on the direction of Aura Investments i.e., Aura Investments and Multi Retail go up and down completely randomly.
Pair Corralation between Aura Investments and Multi Retail
Assuming the 90 days trading horizon Aura Investments is expected to under-perform the Multi Retail. But the stock apears to be less risky and, when comparing its historical volatility, Aura Investments is 1.49 times less risky than Multi Retail. The stock trades about -0.09 of its potential returns per unit of risk. The Multi Retail Group is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 103,300 in Multi Retail Group on September 1, 2024 and sell it today you would earn a total of 600.00 from holding Multi Retail Group or generate 0.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aura Investments vs. Multi Retail Group
Performance |
| Timeline |
| Aura Investments |
| Multi Retail Group |
Aura Investments and Multi Retail Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aura Investments and Multi Retail
The main advantage of trading using opposite Aura Investments and Multi Retail positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aura Investments position performs unexpectedly, Multi Retail 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 Multi Retail will offset losses from the drop in Multi Retail's long position.| Aura Investments vs. Israel Canada | Aura Investments vs. Azrieli Group | Aura Investments vs. Delek Group | Aura Investments vs. Shikun Binui |
| Multi Retail vs. Suny Cellular Communication | Multi Retail vs. Teuza A Fairchild | Multi Retail vs. Israel China Biotechnology | Multi Retail vs. B Communications |
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 CEOs Directory module to screen CEOs from public companies around the world.
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