Correlation Between Aura Investments and YD More
Can any of the company-specific risk be diversified away by investing in both Aura Investments and YD More 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 YD More into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aura Investments and YD More Investments, you can compare the effects of market volatilities on Aura Investments and YD More 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 YD More. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aura Investments and YD More.
Diversification Opportunities for Aura Investments and YD More
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Aura and MRIN is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Aura Investments and YD More Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on YD More Investments 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 YD More. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of YD More Investments has no effect on the direction of Aura Investments i.e., Aura Investments and YD More go up and down completely randomly.
Pair Corralation between Aura Investments and YD More
Assuming the 90 days trading horizon Aura Investments is expected to generate 5.11 times less return on investment than YD More. But when comparing it to its historical volatility, Aura Investments is 1.87 times less risky than YD More. It trades about 0.12 of its potential returns per unit of risk. YD More Investments is currently generating about 0.33 of returns per unit of risk over similar time horizon. If you would invest 120,403 in YD More Investments on September 18, 2024 and sell it today you would earn a total of 23,897 from holding YD More Investments or generate 19.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 94.44% |
| Values | Daily Returns |
Aura Investments vs. YD More Investments
Performance |
| Timeline |
| Aura Investments |
| YD More Investments |
Aura Investments and YD More Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aura Investments and YD More
The main advantage of trading using opposite Aura Investments and YD More positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aura Investments position performs unexpectedly, YD More 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 YD More will offset losses from the drop in YD More's long position.| Aura Investments vs. Isras Investment | Aura Investments vs. Sella Real Estate | Aura Investments vs. Harel Insurance Investments | Aura Investments vs. B Communications |
| YD More vs. Bank Hapoalim | YD More vs. Israel Discount Bank | YD More vs. Mizrahi Tefahot | YD More vs. Bezeq Israeli Telecommunication |
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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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