Correlation Between Auto Trader and CANON MARKETING
Can any of the company-specific risk be diversified away by investing in both Auto Trader and CANON MARKETING 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 Auto Trader and CANON MARKETING into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Auto Trader Group and CANON MARKETING JP, you can compare the effects of market volatilities on Auto Trader and CANON MARKETING 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 Auto Trader with a short position of CANON MARKETING. Check out your portfolio center. Please also check ongoing floating volatility patterns of Auto Trader and CANON MARKETING.
Diversification Opportunities for Auto Trader and CANON MARKETING
-0.23 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Auto and CANON is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Auto Trader Group and CANON MARKETING JP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CANON MARKETING JP and Auto Trader 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 Auto Trader Group are associated (or correlated) with CANON MARKETING. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CANON MARKETING JP has no effect on the direction of Auto Trader i.e., Auto Trader and CANON MARKETING go up and down completely randomly.
Pair Corralation between Auto Trader and CANON MARKETING
Assuming the 90 days trading horizon Auto Trader Group is expected to under-perform the CANON MARKETING. In addition to that, Auto Trader is 1.88 times more volatile than CANON MARKETING JP. It trades about -0.09 of its total potential returns per unit of risk. CANON MARKETING JP is currently generating about 0.35 per unit of volatility. If you would invest 2,700 in CANON MARKETING JP on August 29, 2024 and sell it today you would earn a total of 240.00 from holding CANON MARKETING JP or generate 8.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Auto Trader Group vs. CANON MARKETING JP
Performance |
| Timeline |
| Auto Trader Group |
| CANON MARKETING JP |
Auto Trader and CANON MARKETING Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Auto Trader and CANON MARKETING
The main advantage of trading using opposite Auto Trader and CANON MARKETING positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Auto Trader position performs unexpectedly, CANON MARKETING 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 CANON MARKETING will offset losses from the drop in CANON MARKETING's long position.| Auto Trader vs. Apple Inc | Auto Trader vs. Apple Inc | Auto Trader vs. Apple Inc | Auto Trader vs. Apple Inc |
| CANON MARKETING vs. Apple Inc | CANON MARKETING vs. Apple Inc | CANON MARKETING vs. Microsoft | CANON MARKETING vs. Microsoft |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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