Correlation Between Nextgen and Aura Investments
Can any of the company-specific risk be diversified away by investing in both Nextgen 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 Nextgen and Aura Investments into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nextgen and Aura Investments, you can compare the effects of market volatilities on Nextgen 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 Nextgen with a short position of Aura Investments. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nextgen and Aura Investments.
Diversification Opportunities for Nextgen and Aura Investments
-0.07 | Correlation Coefficient |
Good diversification
The 3 months correlation between Nextgen and Aura is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding Nextgen and Aura Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aura Investments and Nextgen 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 Nextgen 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 Nextgen i.e., Nextgen and Aura Investments go up and down completely randomly.
Pair Corralation between Nextgen and Aura Investments
Assuming the 90 days trading horizon Nextgen is expected to generate 2.68 times more return on investment than Aura Investments. However, Nextgen is 2.68 times more volatile than Aura Investments. It trades about -0.08 of its potential returns per unit of risk. Aura Investments is currently generating about -0.24 per unit of risk. If you would invest 6,700 in Nextgen on November 27, 2024 and sell it today you would lose (700.00) from holding Nextgen or give up 10.45% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nextgen vs. Aura Investments
Performance |
| Timeline |
| Nextgen |
| Aura Investments |
Nextgen and Aura Investments Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nextgen and Aura Investments
The main advantage of trading using opposite Nextgen and Aura Investments positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nextgen 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.| Nextgen vs. Unic tech Limited Partnership | Nextgen vs. Priortech | Nextgen vs. Rapac Communication Infrastructure | Nextgen vs. Iargento Hi Tech |
| 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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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