Correlation Between Fattal 1998 and Aura Investments

Can any of the company-specific risk be diversified away by investing in both Fattal 1998 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 Fattal 1998 and Aura Investments into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Fattal 1998 Holdings and Aura Investments, you can compare the effects of market volatilities on Fattal 1998 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 Fattal 1998 with a short position of Aura Investments. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fattal 1998 and Aura Investments.

Diversification Opportunities for Fattal 1998 and Aura Investments

0.12

Correlation Coefficient

Fattal 1998  Aura Investments

Average diversification

The 3 months correlation between Fattal and Aura is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Fattal 1998 Holdings and Aura Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aura Investments and Fattal 1998 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 Fattal 1998 Holdings 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 Fattal 1998 i.e., Fattal 1998 and Aura Investments go up and down completely randomly.

Pair Corralation between Fattal 1998 and Aura Investments

Assuming the 90 days trading horizon Fattal 1998 Holdings is expected to generate 0.88 times more return on investment than Aura Investments. However, Fattal 1998 Holdings is 1.13 times less risky than Aura Investments. It trades about -0.05 of its potential returns per unit of risk. Aura Investments is currently generating about -0.14 per unit of risk. If you would invest  5,300,000  in Fattal 1998 Holdings on December 30, 2024 and sell it today you would lose (369,000) from holding Fattal 1998 Holdings or give up 6.96% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Fattal 1998 Holdings  vs.  Aura Investments

Fattal 1998 Holdings

Risk-Adjusted Performance

Very Weak

Over the last 90 days Fattal 1998 Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest uncertain performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Aura Investments

Risk-Adjusted Performance

Very Weak

Over the last 90 days Aura Investments has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Fattal 1998 and Aura Investments

The main advantage of trading using opposite Fattal 1998 and Aura Investments positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fattal 1998 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 Fattal 1998 Holdings 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.

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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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.