Correlation Between YH Dimri and Aura Investments
Can any of the company-specific risk be diversified away by investing in both YH Dimri 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 YH Dimri and Aura Investments into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between YH Dimri Construction and Aura Investments, you can compare the effects of market volatilities on YH Dimri 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 YH Dimri with a short position of Aura Investments. Check out your portfolio center. Please also check ongoing floating volatility patterns of YH Dimri and Aura Investments.
Diversification Opportunities for YH Dimri and Aura Investments
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between DIMRI and Aura is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding YH Dimri Construction and Aura Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aura Investments and YH Dimri 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 YH Dimri Construction 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 YH Dimri i.e., YH Dimri and Aura Investments go up and down completely randomly.
Pair Corralation between YH Dimri and Aura Investments
Assuming the 90 days trading horizon YH Dimri is expected to generate 2.7 times less return on investment than Aura Investments. But when comparing it to its historical volatility, YH Dimri Construction is 1.56 times less risky than Aura Investments. It trades about 0.07 of its potential returns per unit of risk. Aura Investments is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 163,934 in Aura Investments on August 25, 2024 and sell it today you would earn a total of 23,266 from holding Aura Investments or generate 14.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
YH Dimri Construction vs. Aura Investments
Performance |
| Timeline |
| YH Dimri Construction |
| Aura Investments |
YH Dimri and Aura Investments Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with YH Dimri and Aura Investments
The main advantage of trading using opposite YH Dimri and Aura Investments positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if YH Dimri 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.| YH Dimri vs. Israel Canada | YH Dimri vs. Azrieli Group | YH Dimri vs. Delek Group | YH Dimri vs. Shikun Binui |
| 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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