Correlation Between Aura Investments and Sofwave Medical
Can any of the company-specific risk be diversified away by investing in both Aura Investments and Sofwave Medical 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 Sofwave Medical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aura Investments and Sofwave Medical, you can compare the effects of market volatilities on Aura Investments and Sofwave Medical 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 Sofwave Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aura Investments and Sofwave Medical.
Diversification Opportunities for Aura Investments and Sofwave Medical
0.18 | Correlation Coefficient |
Average diversification
The 3 months correlation between Aura and Sofwave is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Aura Investments and Sofwave Medical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sofwave Medical 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 Sofwave Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sofwave Medical has no effect on the direction of Aura Investments i.e., Aura Investments and Sofwave Medical go up and down completely randomly.
Pair Corralation between Aura Investments and Sofwave Medical
Assuming the 90 days trading horizon Aura Investments is expected to generate 0.56 times more return on investment than Sofwave Medical. However, Aura Investments is 1.78 times less risky than Sofwave Medical. It trades about 0.12 of its potential returns per unit of risk. Sofwave Medical is currently generating about 0.03 per unit of risk. If you would invest 191,800 in Aura Investments on September 18, 2024 and sell it today you would earn a total of 6,400 from holding Aura Investments or generate 3.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aura Investments vs. Sofwave Medical
Performance |
| Timeline |
| Aura Investments |
| Sofwave Medical |
Aura Investments and Sofwave Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aura Investments and Sofwave Medical
The main advantage of trading using opposite Aura Investments and Sofwave Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aura Investments position performs unexpectedly, Sofwave Medical 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 Sofwave Medical will offset losses from the drop in Sofwave Medical'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 |
| Sofwave Medical vs. Harel Insurance Investments | Sofwave Medical vs. Shagrir Group Vehicle | Sofwave Medical vs. Rapac Communication Infrastructure | Sofwave Medical vs. Batm Advanced 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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