Correlation Between Afi Properties and Aura Investments

Can any of the company-specific risk be diversified away by investing in both Afi Properties 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 Afi Properties and Aura Investments into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Afi Properties and Aura Investments, you can compare the effects of market volatilities on Afi Properties 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 Afi Properties with a short position of Aura Investments. Check out your portfolio center. Please also check ongoing floating volatility patterns of Afi Properties and Aura Investments.

Diversification Opportunities for Afi Properties and Aura Investments

0.0

Correlation Coefficient

Afi Properties  Aura Investments

Pay attention - limited upside

The 3 months correlation between Afi and Aura is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Afi Properties and Aura Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aura Investments and Afi Properties 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 Afi Properties 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 Afi Properties i.e., Afi Properties and Aura Investments go up and down completely randomly.

Pair Corralation between Afi Properties and Aura Investments

If you would invest  59,047  in Aura Investments on February 26, 2024 and sell it today you would earn a total of  74,253  from holding Aura Investments or generate 125.75% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Afi Properties  vs.  Aura Investments

Afi Properties

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Afi Properties has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Afi Properties is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Aura Investments

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Aura Investments are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Aura Investments is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Afi Properties and Aura Investments

The main advantage of trading using opposite Afi Properties and Aura Investments positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Afi Properties 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.

The idea behind Afi Properties and Aura Investments pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.