Correlation Between Mobilezone Holding and Automatic Data
Can any of the company-specific risk be diversified away by investing in both Mobilezone Holding 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 Mobilezone Holding and Automatic Data into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between mobilezone holding AG and Automatic Data Processing, you can compare the effects of market volatilities on Mobilezone Holding 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 Mobilezone Holding with a short position of Automatic Data. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mobilezone Holding and Automatic Data.
Diversification Opportunities for Mobilezone Holding and Automatic Data
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Mobilezone and Automatic is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding mobilezone holding AG 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 Mobilezone Holding 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 mobilezone holding AG 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 Mobilezone Holding i.e., Mobilezone Holding and Automatic Data go up and down completely randomly.
Pair Corralation between Mobilezone Holding and Automatic Data
Assuming the 90 days trading horizon Mobilezone Holding is expected to generate 2.26 times less return on investment than Automatic Data. But when comparing it to its historical volatility, mobilezone holding AG is 1.63 times less risky than Automatic Data. It trades about 0.13 of its potential returns per unit of risk. Automatic Data Processing is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest 29,085 in Automatic Data Processing on September 4, 2024 and sell it today you would earn a total of 1,459 from holding Automatic Data Processing or generate 5.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
mobilezone holding AG vs. Automatic Data Processing
Performance |
| Timeline |
| mobilezone holding |
| Automatic Data Processing |
Mobilezone Holding and Automatic Data Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mobilezone Holding and Automatic Data
The main advantage of trading using opposite Mobilezone Holding and Automatic Data positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mobilezone Holding 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.| Mobilezone Holding vs. XLMedia PLC | Mobilezone Holding vs. One Media iP | Mobilezone Holding vs. Samsung Electronics Co | Mobilezone Holding vs. Naturhouse Health SA |
| Automatic Data vs. International Consolidated Airlines | Automatic Data vs. Nordic Semiconductor ASA | Automatic Data vs. Gaming Realms plc | Automatic Data vs. Games Workshop Group |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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