Correlation Between Meitav Trade and Aura Investments
Can any of the company-specific risk be diversified away by investing in both Meitav Trade 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 Meitav Trade and Aura Investments into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Meitav Trade Inv and Aura Investments, you can compare the effects of market volatilities on Meitav Trade 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 Meitav Trade with a short position of Aura Investments. Check out your portfolio center. Please also check ongoing floating volatility patterns of Meitav Trade and Aura Investments.
Diversification Opportunities for Meitav Trade and Aura Investments
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Meitav and Aura is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Meitav Trade Inv and Aura Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aura Investments and Meitav Trade 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 Meitav Trade Inv 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 Meitav Trade i.e., Meitav Trade and Aura Investments go up and down completely randomly.
Pair Corralation between Meitav Trade and Aura Investments
Assuming the 90 days trading horizon Meitav Trade Inv is expected to generate 0.47 times more return on investment than Aura Investments. However, Meitav Trade Inv is 2.12 times less risky than Aura Investments. It trades about 0.27 of its potential returns per unit of risk. Aura Investments is currently generating about 0.11 per unit of risk. If you would invest 599.00 in Meitav Trade Inv on September 3, 2024 and sell it today you would earn a total of 546.00 from holding Meitav Trade Inv or generate 91.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 43.01% |
| Values | Daily Returns |
Meitav Trade Inv vs. Aura Investments
Performance |
| Timeline |
| Meitav Trade Inv |
| Aura Investments |
Meitav Trade and Aura Investments Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Meitav Trade and Aura Investments
The main advantage of trading using opposite Meitav Trade and Aura Investments positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Meitav Trade 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.| Meitav Trade vs. Nice | Meitav Trade vs. The Gold Bond | Meitav Trade vs. Bank Leumi Le Israel | Meitav Trade vs. ICL Israel Chemicals |
| 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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