Correlation Between Auto Trader and HUT 8
Can any of the company-specific risk be diversified away by investing in both Auto Trader and HUT 8 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 HUT 8 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 HUT 8 P, you can compare the effects of market volatilities on Auto Trader and HUT 8 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 HUT 8. Check out your portfolio center. Please also check ongoing floating volatility patterns of Auto Trader and HUT 8.
Diversification Opportunities for Auto Trader and HUT 8
-0.62 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Auto and HUT is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Auto Trader Group and HUT 8 P in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HUT 8 P 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 HUT 8. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HUT 8 P has no effect on the direction of Auto Trader i.e., Auto Trader and HUT 8 go up and down completely randomly.
Pair Corralation between Auto Trader and HUT 8
Assuming the 90 days trading horizon Auto Trader Group is expected to under-perform the HUT 8. But the stock apears to be less risky and, when comparing its historical volatility, Auto Trader Group is 3.69 times less risky than HUT 8. The stock trades about -0.13 of its potential returns per unit of risk. The HUT 8 P is currently generating about 0.33 of returns per unit of risk over similar time horizon. If you would invest 1,430 in HUT 8 P on August 25, 2024 and sell it today you would earn a total of 890.00 from holding HUT 8 P or generate 62.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Auto Trader Group vs. HUT 8 P
Performance |
| Timeline |
| Auto Trader Group |
| HUT 8 P |
Auto Trader and HUT 8 Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Auto Trader and HUT 8
The main advantage of trading using opposite Auto Trader and HUT 8 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Auto Trader position performs unexpectedly, HUT 8 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 HUT 8 will offset losses from the drop in HUT 8's long position.| Auto Trader vs. Apple Inc | Auto Trader vs. Apple Inc | Auto Trader vs. Apple Inc | Auto Trader vs. Apple Inc |
| HUT 8 vs. CANON MARKETING JP | HUT 8 vs. Auto Trader Group | HUT 8 vs. Transportadora de Gas | HUT 8 vs. TITANIUM TRANSPORTGROUP |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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