Correlation Between Computer Direct and Aura Investments
Can any of the company-specific risk be diversified away by investing in both Computer Direct and Aura Investments 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 Computer Direct and Aura Investments into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Computer Direct and Aura Investments, you can compare the effects of market volatilities on Computer Direct and Aura Investments 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 Computer Direct with a short position of Aura Investments. Check out your portfolio center. Please also check ongoing floating volatility patterns of Computer Direct and Aura Investments.
Diversification Opportunities for Computer Direct and Aura Investments
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Computer and Aura is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Computer Direct and Aura Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aura Investments and Computer Direct 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 Computer Direct are associated (or correlated) with Aura Investments. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aura Investments has no effect on the direction of Computer Direct i.e., Computer Direct and Aura Investments go up and down completely randomly.
Pair Corralation between Computer Direct and Aura Investments
Assuming the 90 days trading horizon Computer Direct is expected to generate 1.4 times less return on investment than Aura Investments. But when comparing it to its historical volatility, Computer Direct is 1.36 times less risky than Aura Investments. It trades about 0.16 of its potential returns per unit of risk. Aura Investments is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest 82,750 in Aura Investments on August 25, 2024 and sell it today you would earn a total of 104,450 from holding Aura Investments or generate 126.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Computer Direct vs. Aura Investments
Performance |
| Timeline |
| Computer Direct |
| Aura Investments |
Computer Direct and Aura Investments Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Computer Direct and Aura Investments
The main advantage of trading using opposite Computer Direct and Aura Investments positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Computer Direct position performs unexpectedly, Aura Investments 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 Aura Investments will offset losses from the drop in Aura Investments' long position.| Computer Direct vs. Matrix | Computer Direct vs. Hilan | Computer Direct vs. One Software Technologies | Computer Direct vs. Atreyu Capital Markets |
| Aura Investments vs. Israel Canada | Aura Investments vs. Azrieli Group | Aura Investments vs. Delek Group | Aura Investments vs. Shikun Binui |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
Other Complementary Tools
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| Bonds Directory Find actively traded corporate debentures issued by US companies |