Correlation Between Isras Investment and Aura Investments
Can any of the company-specific risk be diversified away by investing in both Isras Investment 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 Isras Investment and Aura Investments into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Isras Investment and Aura Investments, you can compare the effects of market volatilities on Isras Investment 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 Isras Investment with a short position of Aura Investments. Check out your portfolio center. Please also check ongoing floating volatility patterns of Isras Investment and Aura Investments.
Diversification Opportunities for Isras Investment and Aura Investments
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Isras and Aura is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Isras Investment and Aura Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aura Investments and Isras Investment 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 Isras Investment 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 Isras Investment i.e., Isras Investment and Aura Investments go up and down completely randomly.
Pair Corralation between Isras Investment and Aura Investments
Assuming the 90 days trading horizon Isras Investment is expected to generate 0.75 times more return on investment than Aura Investments. However, Isras Investment is 1.34 times less risky than Aura Investments. It trades about 0.43 of its potential returns per unit of risk. Aura Investments is currently generating about 0.07 per unit of risk. If you would invest 7,575,000 in Isras Investment on August 29, 2024 and sell it today you would earn a total of 975,000 from holding Isras Investment or generate 12.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Isras Investment vs. Aura Investments
Performance |
| Timeline |
| Isras Investment |
| Aura Investments |
Isras Investment and Aura Investments Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Isras Investment and Aura Investments
The main advantage of trading using opposite Isras Investment and Aura Investments positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Isras Investment 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.| Isras Investment vs. Alony Hetz Properties | Isras Investment vs. Fox Wizel | Isras Investment vs. Amot Investments | Isras Investment vs. Harel Insurance Investments |
| 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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