Correlation Between Automobile and Atinum Investment
Can any of the company-specific risk be diversified away by investing in both Automobile and Atinum Investment 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 Automobile and Atinum Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Automobile Pc and Atinum Investment Co, you can compare the effects of market volatilities on Automobile and Atinum Investment 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 Automobile with a short position of Atinum Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Automobile and Atinum Investment.
Diversification Opportunities for Automobile and Atinum Investment
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Automobile and Atinum is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Automobile Pc and Atinum Investment Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Atinum Investment and Automobile 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 Automobile Pc are associated (or correlated) with Atinum Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Atinum Investment has no effect on the direction of Automobile i.e., Automobile and Atinum Investment go up and down completely randomly.
Pair Corralation between Automobile and Atinum Investment
Assuming the 90 days trading horizon Automobile Pc is expected to generate 1.67 times more return on investment than Atinum Investment. However, Automobile is 1.67 times more volatile than Atinum Investment Co. It trades about 0.0 of its potential returns per unit of risk. Atinum Investment Co is currently generating about -0.13 per unit of risk. If you would invest 69,300 in Automobile Pc on September 1, 2024 and sell it today you would lose (1,300) from holding Automobile Pc or give up 1.88% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Automobile Pc vs. Atinum Investment Co
Performance |
| Timeline |
| Automobile Pc |
| Atinum Investment |
Automobile and Atinum Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Automobile and Atinum Investment
The main advantage of trading using opposite Automobile and Atinum Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Automobile position performs unexpectedly, Atinum Investment 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 Atinum Investment will offset losses from the drop in Atinum Investment's long position.| Automobile vs. Miwon Chemical | Automobile vs. Sung Bo Chemicals | Automobile vs. Chin Yang Chemical | Automobile vs. Daehan Synthetic Fiber |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
Other Complementary Tools
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios |