Correlation Between Automatic Data and FinecoBank SpA
Can any of the company-specific risk be diversified away by investing in both Automatic Data and FinecoBank SpA 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 Automatic Data and FinecoBank SpA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Automatic Data Processing and FinecoBank SpA, you can compare the effects of market volatilities on Automatic Data and FinecoBank SpA 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 Automatic Data with a short position of FinecoBank SpA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Automatic Data and FinecoBank SpA.
Diversification Opportunities for Automatic Data and FinecoBank SpA
-0.43 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Automatic and FinecoBank is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Automatic Data Processing and FinecoBank SpA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FinecoBank SpA and Automatic Data 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 Automatic Data Processing are associated (or correlated) with FinecoBank SpA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FinecoBank SpA has no effect on the direction of Automatic Data i.e., Automatic Data and FinecoBank SpA go up and down completely randomly.
Pair Corralation between Automatic Data and FinecoBank SpA
Assuming the 90 days trading horizon Automatic Data Processing is expected to generate 3.79 times more return on investment than FinecoBank SpA. However, Automatic Data is 3.79 times more volatile than FinecoBank SpA. It trades about 0.03 of its potential returns per unit of risk. FinecoBank SpA is currently generating about 0.03 per unit of risk. If you would invest 21,541 in Automatic Data Processing on October 26, 2024 and sell it today you would earn a total of 8,244 from holding Automatic Data Processing or generate 38.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.6% |
| Values | Daily Returns |
Automatic Data Processing vs. FinecoBank SpA
Performance |
| Timeline |
| Automatic Data Processing |
| FinecoBank SpA |
Automatic Data and FinecoBank SpA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Automatic Data and FinecoBank SpA
The main advantage of trading using opposite Automatic Data and FinecoBank SpA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Automatic Data position performs unexpectedly, FinecoBank SpA 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 FinecoBank SpA will offset losses from the drop in FinecoBank SpA's long position.| Automatic Data vs. Travel Leisure Co | Automatic Data vs. LBG Media PLC | Automatic Data vs. Universal Display Corp | Automatic Data vs. Molson Coors Beverage |
| FinecoBank SpA vs. Oxford Technology 2 | FinecoBank SpA vs. Vitec Software Group | FinecoBank SpA vs. Cognizant Technology Solutions | FinecoBank SpA vs. Monster Beverage Corp |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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