Correlation Between Aura Investments and Meitav Trade
Can any of the company-specific risk be diversified away by investing in both Aura Investments and Meitav Trade 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 Meitav Trade into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aura Investments and Meitav Trade Inv, you can compare the effects of market volatilities on Aura Investments and Meitav Trade 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 Meitav Trade. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aura Investments and Meitav Trade.
Diversification Opportunities for Aura Investments and Meitav Trade
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Aura and Meitav is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Aura Investments and Meitav Trade Inv in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Meitav Trade Inv 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 Meitav Trade. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Meitav Trade Inv has no effect on the direction of Aura Investments i.e., Aura Investments and Meitav Trade go up and down completely randomly.
Pair Corralation between Aura Investments and Meitav Trade
Assuming the 90 days trading horizon Aura Investments is expected to generate 1.7 times more return on investment than Meitav Trade. However, Aura Investments is 1.7 times more volatile than Meitav Trade Inv. It trades about 0.17 of its potential returns per unit of risk. Meitav Trade Inv is currently generating about 0.26 per unit of risk. If you would invest 76,903 in Aura Investments on September 4, 2024 and sell it today you would earn a total of 109,397 from holding Aura Investments or generate 142.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 74.22% |
| Values | Daily Returns |
Aura Investments vs. Meitav Trade Inv
Performance |
| Timeline |
| Aura Investments |
| Meitav Trade Inv |
Aura Investments and Meitav Trade Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aura Investments and Meitav Trade
The main advantage of trading using opposite Aura Investments and Meitav Trade positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aura Investments position performs unexpectedly, Meitav Trade 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 Meitav Trade will offset losses from the drop in Meitav Trade's long position.| Aura Investments vs. Israel Canada | Aura Investments vs. Azrieli Group | Aura Investments vs. Delek Group | Aura Investments vs. Shikun Binui |
| Meitav Trade vs. Batm Advanced Communications | Meitav Trade vs. YD More Investments | Meitav Trade vs. Analyst IMS Investment | Meitav Trade vs. Oron Group 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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