Correlation Between Aura Investments and Willy Food
Can any of the company-specific risk be diversified away by investing in both Aura Investments and Willy Food 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 Willy Food into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aura Investments and Willy Food, you can compare the effects of market volatilities on Aura Investments and Willy Food 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 Willy Food. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aura Investments and Willy Food.
Diversification Opportunities for Aura Investments and Willy Food
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Aura and Willy is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Aura Investments and Willy Food in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Willy Food 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 Willy Food. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Willy Food has no effect on the direction of Aura Investments i.e., Aura Investments and Willy Food go up and down completely randomly.
Pair Corralation between Aura Investments and Willy Food
Assuming the 90 days trading horizon Aura Investments is expected to generate 1.07 times more return on investment than Willy Food. However, Aura Investments is 1.07 times more volatile than Willy Food. It trades about 0.16 of its potential returns per unit of risk. Willy Food is currently generating about 0.17 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 56,020 from holding Aura Investments or generate 43.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aura Investments vs. Willy Food
Performance |
| Timeline |
| Aura Investments |
| Willy Food |
Aura Investments and Willy Food Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aura Investments and Willy Food
The main advantage of trading using opposite Aura Investments and Willy Food positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aura Investments position performs unexpectedly, Willy Food 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 Willy Food will offset losses from the drop in Willy Food's long position.| Aura Investments vs. Israel Canada | Aura Investments vs. Azrieli Group | Aura Investments vs. Delek Group | Aura Investments vs. Israel Discount Bank |
| Willy Food vs. Strauss Group | Willy Food vs. B Communications | Willy Food vs. Holmes Place International | Willy Food vs. Nova |
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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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