Correlation Between Corporate Travel and AUTO TRADER
Can any of the company-specific risk be diversified away by investing in both Corporate Travel and AUTO TRADER 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 Corporate Travel and AUTO TRADER into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Corporate Travel Management and AUTO TRADER ADR, you can compare the effects of market volatilities on Corporate Travel and AUTO TRADER 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 Corporate Travel with a short position of AUTO TRADER. Check out your portfolio center. Please also check ongoing floating volatility patterns of Corporate Travel and AUTO TRADER.
Diversification Opportunities for Corporate Travel and AUTO TRADER
-0.47 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Corporate and AUTO is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Corporate Travel Management and AUTO TRADER ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AUTO TRADER ADR and Corporate Travel 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 Corporate Travel Management are associated (or correlated) with AUTO TRADER. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AUTO TRADER ADR has no effect on the direction of Corporate Travel i.e., Corporate Travel and AUTO TRADER go up and down completely randomly.
Pair Corralation between Corporate Travel and AUTO TRADER
Assuming the 90 days trading horizon Corporate Travel Management is expected to generate 2.09 times more return on investment than AUTO TRADER. However, Corporate Travel is 2.09 times more volatile than AUTO TRADER ADR. It trades about 0.04 of its potential returns per unit of risk. AUTO TRADER ADR is currently generating about 0.05 per unit of risk. If you would invest 776.00 in Corporate Travel Management on September 3, 2024 and sell it today you would earn a total of 79.00 from holding Corporate Travel Management or generate 10.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Corporate Travel Management vs. AUTO TRADER ADR
Performance |
| Timeline |
| Corporate Travel Man |
| AUTO TRADER ADR |
Corporate Travel and AUTO TRADER Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Corporate Travel and AUTO TRADER
The main advantage of trading using opposite Corporate Travel and AUTO TRADER positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Corporate Travel position performs unexpectedly, AUTO TRADER 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 AUTO TRADER will offset losses from the drop in AUTO TRADER's long position.| Corporate Travel vs. EPSILON HEALTHCARE LTD | Corporate Travel vs. North American Construction | Corporate Travel vs. H FARM SPA | Corporate Travel vs. Cardinal Health |
| AUTO TRADER vs. Alphabet Class A | AUTO TRADER vs. Meta Platforms | AUTO TRADER vs. Meta Platforms | AUTO TRADER vs. Tencent Holdings |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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