Correlation Between Kaufman Et and Automatic Data
Can any of the company-specific risk be diversified away by investing in both Kaufman Et and Automatic Data 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 Kaufman Et and Automatic Data into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kaufman Et Broad and Automatic Data Processing, you can compare the effects of market volatilities on Kaufman Et and Automatic Data 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 Kaufman Et with a short position of Automatic Data. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kaufman Et and Automatic Data.
Diversification Opportunities for Kaufman Et and Automatic Data
-0.49 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Kaufman and Automatic is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Kaufman Et Broad and Automatic Data Processing in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Automatic Data Processing and Kaufman Et 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 Kaufman Et Broad are associated (or correlated) with Automatic Data. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Automatic Data Processing has no effect on the direction of Kaufman Et i.e., Kaufman Et and Automatic Data go up and down completely randomly.
Pair Corralation between Kaufman Et and Automatic Data
Assuming the 90 days trading horizon Kaufman Et Broad is expected to generate 0.93 times more return on investment than Automatic Data. However, Kaufman Et Broad is 1.07 times less risky than Automatic Data. It trades about 0.19 of its potential returns per unit of risk. Automatic Data Processing is currently generating about -0.18 per unit of risk. If you would invest 3,175 in Kaufman Et Broad on October 11, 2024 and sell it today you would earn a total of 90.00 from holding Kaufman Et Broad or generate 2.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
Kaufman Et Broad vs. Automatic Data Processing
Performance |
| Timeline |
| Kaufman Et Broad |
| Automatic Data Processing |
Kaufman Et and Automatic Data Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kaufman Et and Automatic Data
The main advantage of trading using opposite Kaufman Et and Automatic Data positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kaufman Et position performs unexpectedly, Automatic Data 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 Automatic Data will offset losses from the drop in Automatic Data's long position.| Kaufman Et vs. Aptitude Software Group | Kaufman Et vs. Coor Service Management | Kaufman Et vs. Technicolor | Kaufman Et vs. Take Two Interactive Software |
| Automatic Data vs. Compal Electronics GDR | Automatic Data vs. Vitec Software Group | Automatic Data vs. Arrow Electronics | Automatic Data vs. Axway Software SA |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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