Correlation Between Feat Fund and Aura Investments
Can any of the company-specific risk be diversified away by investing in both Feat Fund 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 Feat Fund and Aura Investments into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Feat Fund Investments and Aura Investments, you can compare the effects of market volatilities on Feat Fund 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 Feat Fund with a short position of Aura Investments. Check out your portfolio center. Please also check ongoing floating volatility patterns of Feat Fund and Aura Investments.
Diversification Opportunities for Feat Fund and Aura Investments
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Feat and Aura is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Feat Fund Investments and Aura Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aura Investments and Feat Fund 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 Feat Fund Investments 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 Feat Fund i.e., Feat Fund and Aura Investments go up and down completely randomly.
Pair Corralation between Feat Fund and Aura Investments
Assuming the 90 days trading horizon Feat Fund is expected to generate 2.08 times less return on investment than Aura Investments. But when comparing it to its historical volatility, Feat Fund Investments is 1.37 times less risky than Aura Investments. It trades about 0.13 of its potential returns per unit of risk. Aura Investments is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest 121,008 in Aura Investments on September 3, 2024 and sell it today you would earn a total of 65,292 from holding Aura Investments or generate 53.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Feat Fund Investments vs. Aura Investments
Performance |
| Timeline |
| Feat Fund Investments |
| Aura Investments |
Feat Fund and Aura Investments Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Feat Fund and Aura Investments
The main advantage of trading using opposite Feat Fund and Aura Investments positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Feat Fund 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.| Feat Fund vs. Bezeq Israeli Telecommunication | Feat Fund vs. Arad Investment Industrial | Feat Fund vs. Hiron Trade Investments Industrial | Feat Fund vs. Imed Infinity Medical Limited |
| 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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