Correlation Between Automobile and TJ Media
Can any of the company-specific risk be diversified away by investing in both Automobile and TJ Media 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 TJ Media into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Automobile Pc and TJ media Co, you can compare the effects of market volatilities on Automobile and TJ Media 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 TJ Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of Automobile and TJ Media.
Diversification Opportunities for Automobile and TJ Media
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Automobile and 032540 is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Automobile Pc and TJ media Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TJ media 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 TJ Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TJ media has no effect on the direction of Automobile i.e., Automobile and TJ Media go up and down completely randomly.
Pair Corralation between Automobile and TJ Media
Assuming the 90 days trading horizon Automobile Pc is expected to under-perform the TJ Media. In addition to that, Automobile is 2.52 times more volatile than TJ media Co. It trades about -0.2 of its total potential returns per unit of risk. TJ media Co is currently generating about -0.08 per unit of volatility. If you would invest 510,000 in TJ media Co on September 12, 2024 and sell it today you would lose (15,000) from holding TJ media Co or give up 2.94% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Automobile Pc vs. TJ media Co
Performance |
| Timeline |
| Automobile Pc |
| TJ media |
Automobile and TJ Media Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Automobile and TJ Media
The main advantage of trading using opposite Automobile and TJ Media positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Automobile position performs unexpectedly, TJ Media 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 TJ Media will offset losses from the drop in TJ Media's long position.| Automobile vs. Daou Data Corp | Automobile vs. Solution Advanced Technology | Automobile vs. Busan Industrial Co | Automobile vs. Busan Ind |
| TJ Media vs. RFTech Co | TJ Media vs. Nh Investment And | TJ Media vs. Stic Investments | TJ Media vs. PH Tech Co |
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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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