Correlation Between Aura Investments and Tel Aviv
Can any of the company-specific risk be diversified away by investing in both Aura Investments and Tel Aviv 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 Tel Aviv into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aura Investments and Tel Aviv 35, you can compare the effects of market volatilities on Aura Investments and Tel Aviv 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 Tel Aviv. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aura Investments and Tel Aviv.
Diversification Opportunities for Aura Investments and Tel Aviv
0.96 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Aura and Tel is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding Aura Investments and Tel Aviv 35 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tel Aviv 35 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 Tel Aviv. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tel Aviv 35 has no effect on the direction of Aura Investments i.e., Aura Investments and Tel Aviv go up and down completely randomly.
Pair Corralation between Aura Investments and Tel Aviv
Assuming the 90 days trading horizon Aura Investments is expected to generate 2.47 times more return on investment than Tel Aviv. However, Aura Investments is 2.47 times more volatile than Tel Aviv 35. It trades about 0.16 of its potential returns per unit of risk. Tel Aviv 35 is currently generating about 0.15 per unit of risk. If you would invest 92,472 in Aura Investments on September 14, 2024 and sell it today you would earn a total of 101,928 from holding Aura Investments or generate 110.23% 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. Tel Aviv 35
Performance |
| Timeline |
Aura Investments and Tel Aviv Volatility Contrast
Predicted Return Density |
| Returns |
Aura Investments
Pair trading matchups for Aura Investments
Tel Aviv 35
Pair trading matchups for Tel Aviv
Pair Trading with Aura Investments and Tel Aviv
The main advantage of trading using opposite Aura Investments and Tel Aviv positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aura Investments position performs unexpectedly, Tel Aviv 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 Tel Aviv will offset losses from the drop in Tel Aviv's long position.| Aura Investments vs. Israel Canada | Aura Investments vs. Azrieli Group | Aura Investments vs. Delek Group | Aura Investments vs. Shikun Binui |
| Tel Aviv vs. Skyline Investments | Tel Aviv vs. Analyst IMS Investment | Tel Aviv vs. Aura Investments | Tel Aviv vs. Discount Investment Corp |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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