Correlation Between Multi Retail and Aura Investments
Can any of the company-specific risk be diversified away by investing in both Multi Retail 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 Multi Retail and Aura Investments into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Multi Retail Group and Aura Investments, you can compare the effects of market volatilities on Multi Retail 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 Multi Retail with a short position of Aura Investments. Check out your portfolio center. Please also check ongoing floating volatility patterns of Multi Retail and Aura Investments.
Diversification Opportunities for Multi Retail and Aura Investments
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Multi and Aura is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Multi Retail Group and Aura Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aura Investments and Multi Retail 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 Multi Retail Group 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 Multi Retail i.e., Multi Retail and Aura Investments go up and down completely randomly.
Pair Corralation between Multi Retail and Aura Investments
Assuming the 90 days trading horizon Multi Retail Group is expected to generate 1.49 times more return on investment than Aura Investments. However, Multi Retail is 1.49 times more volatile than Aura Investments. It trades about 0.02 of its potential returns per unit of risk. Aura Investments is currently generating about -0.09 per unit of risk. If you would invest 103,300 in Multi Retail Group on September 1, 2024 and sell it today you would earn a total of 600.00 from holding Multi Retail Group or generate 0.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Multi Retail Group vs. Aura Investments
Performance |
| Timeline |
| Multi Retail Group |
| Aura Investments |
Multi Retail and Aura Investments Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Multi Retail and Aura Investments
The main advantage of trading using opposite Multi Retail and Aura Investments positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Multi Retail 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.| Multi Retail vs. Suny Cellular Communication | Multi Retail vs. Teuza A Fairchild | Multi Retail vs. Israel China Biotechnology | Multi Retail vs. B Communications |
| 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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