Correlation Between Auto Trader and Perusahaan Perseroan
Can any of the company-specific risk be diversified away by investing in both Auto Trader and Perusahaan Perseroan 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 Perusahaan Perseroan 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 Perusahaan Perseroan PT, you can compare the effects of market volatilities on Auto Trader and Perusahaan Perseroan 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 Perusahaan Perseroan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Auto Trader and Perusahaan Perseroan.
Diversification Opportunities for Auto Trader and Perusahaan Perseroan
0.21 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Auto and Perusahaan is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Auto Trader Group and Perusahaan Perseroan PT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Perusahaan Perseroan 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 Perusahaan Perseroan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Perusahaan Perseroan has no effect on the direction of Auto Trader i.e., Auto Trader and Perusahaan Perseroan go up and down completely randomly.
Pair Corralation between Auto Trader and Perusahaan Perseroan
Assuming the 90 days trading horizon Auto Trader Group is expected to generate 0.52 times more return on investment than Perusahaan Perseroan. However, Auto Trader Group is 1.92 times less risky than Perusahaan Perseroan. It trades about 0.15 of its potential returns per unit of risk. Perusahaan Perseroan PT is currently generating about -0.16 per unit of risk. If you would invest 905.00 in Auto Trader Group on November 28, 2024 and sell it today you would earn a total of 35.00 from holding Auto Trader Group or generate 3.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Auto Trader Group vs. Perusahaan Perseroan PT
Performance |
| Timeline |
| Auto Trader Group |
| Perusahaan Perseroan |
Auto Trader and Perusahaan Perseroan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Auto Trader and Perusahaan Perseroan
The main advantage of trading using opposite Auto Trader and Perusahaan Perseroan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Auto Trader position performs unexpectedly, Perusahaan Perseroan 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 Perusahaan Perseroan will offset losses from the drop in Perusahaan Perseroan's long position.| Auto Trader vs. FIH MOBILE | Auto Trader vs. Alibaba Health Information | Auto Trader vs. CN DATANG C | Auto Trader vs. Alliance Data Systems |
| Perusahaan Perseroan vs. Siamgas And Petrochemicals | Perusahaan Perseroan vs. Chengdu PUTIAN Telecommunications | Perusahaan Perseroan vs. FIH MOBILE | Perusahaan Perseroan vs. Tower One Wireless |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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