Correlation Between Aura Investments and Sure Tech
Can any of the company-specific risk be diversified away by investing in both Aura Investments and Sure Tech 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 Sure Tech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aura Investments and Sure Tech Investments LP, you can compare the effects of market volatilities on Aura Investments and Sure Tech 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 Sure Tech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aura Investments and Sure Tech.
Diversification Opportunities for Aura Investments and Sure Tech
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Aura and Sure is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Aura Investments and Sure Tech Investments LP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sure Tech 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 Sure Tech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sure Tech Investments has no effect on the direction of Aura Investments i.e., Aura Investments and Sure Tech go up and down completely randomly.
Pair Corralation between Aura Investments and Sure Tech
Assuming the 90 days trading horizon Aura Investments is expected to generate 0.87 times more return on investment than Sure Tech. However, Aura Investments is 1.16 times less risky than Sure Tech. It trades about 0.17 of its potential returns per unit of risk. Sure Tech Investments LP is currently generating about -0.08 per unit of risk. If you would invest 127,980 in Aura Investments on August 29, 2024 and sell it today you would earn a total of 57,720 from holding Aura Investments or generate 45.1% 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. Sure Tech Investments LP
Performance |
| Timeline |
| Aura Investments |
| Sure Tech Investments |
Aura Investments and Sure Tech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aura Investments and Sure Tech
The main advantage of trading using opposite Aura Investments and Sure Tech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aura Investments position performs unexpectedly, Sure Tech 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 Sure Tech will offset losses from the drop in Sure Tech's long position.| Aura Investments vs. Israel Canada | Aura Investments vs. Azrieli Group | Aura Investments vs. Delek Group | Aura Investments vs. Shikun Binui |
| Sure Tech vs. Meitav Dash Investments | Sure Tech vs. IBI Inv House | Sure Tech vs. Mivtach Shamir | Sure Tech vs. Emilia Devel |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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