Correlation Between Auto Trader and Aurubis AG
Can any of the company-specific risk be diversified away by investing in both Auto Trader and Aurubis AG 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 Aurubis AG 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 Aurubis AG, you can compare the effects of market volatilities on Auto Trader and Aurubis AG 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 Aurubis AG. Check out your portfolio center. Please also check ongoing floating volatility patterns of Auto Trader and Aurubis AG.
Diversification Opportunities for Auto Trader and Aurubis AG
-0.68 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Auto and Aurubis is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding Auto Trader Group and Aurubis AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aurubis AG 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 Aurubis AG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aurubis AG has no effect on the direction of Auto Trader i.e., Auto Trader and Aurubis AG go up and down completely randomly.
Pair Corralation between Auto Trader and Aurubis AG
Assuming the 90 days trading horizon Auto Trader Group is expected to generate 0.68 times more return on investment than Aurubis AG. However, Auto Trader Group is 1.47 times less risky than Aurubis AG. It trades about 0.08 of its potential returns per unit of risk. Aurubis AG is currently generating about 0.02 per unit of risk. If you would invest 576.00 in Auto Trader Group on September 14, 2024 and sell it today you would earn a total of 424.00 from holding Auto Trader Group or generate 73.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Auto Trader Group vs. Aurubis AG
Performance |
| Timeline |
| Auto Trader Group |
| Aurubis AG |
Auto Trader and Aurubis AG Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Auto Trader and Aurubis AG
The main advantage of trading using opposite Auto Trader and Aurubis AG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Auto Trader position performs unexpectedly, Aurubis AG 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 Aurubis AG will offset losses from the drop in Aurubis AG's long position.| Auto Trader vs. Apple Inc | Auto Trader vs. Apple Inc | Auto Trader vs. Apple Inc | Auto Trader vs. Apple Inc |
| Aurubis AG vs. Auto Trader Group | Aurubis AG vs. GLG LIFE TECH | Aurubis AG vs. TRADEDOUBLER AB SK | Aurubis AG vs. PKSHA TECHNOLOGY INC |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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