Correlation Between AUTO TRADER and AXA SA
Can any of the company-specific risk be diversified away by investing in both AUTO TRADER and AXA SA 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 AXA SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AUTO TRADER ADR and AXA SA, you can compare the effects of market volatilities on AUTO TRADER and AXA SA 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 AXA SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of AUTO TRADER and AXA SA.
Diversification Opportunities for AUTO TRADER and AXA SA
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between AUTO and AXA is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding AUTO TRADER ADR and AXA SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AXA SA 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 ADR are associated (or correlated) with AXA SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AXA SA has no effect on the direction of AUTO TRADER i.e., AUTO TRADER and AXA SA go up and down completely randomly.
Pair Corralation between AUTO TRADER and AXA SA
Assuming the 90 days trading horizon AUTO TRADER ADR is expected to generate 1.31 times more return on investment than AXA SA. However, AUTO TRADER is 1.31 times more volatile than AXA SA. It trades about 0.08 of its potential returns per unit of risk. AXA SA is currently generating about 0.06 per unit of risk. If you would invest 138.00 in AUTO TRADER ADR on September 12, 2024 and sell it today you would earn a total of 112.00 from holding AUTO TRADER ADR or generate 81.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
AUTO TRADER ADR vs. AXA SA
Performance |
| Timeline |
| AUTO TRADER ADR |
| AXA SA |
AUTO TRADER and AXA SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AUTO TRADER and AXA SA
The main advantage of trading using opposite AUTO TRADER and AXA SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AUTO TRADER position performs unexpectedly, AXA SA 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 AXA SA will offset losses from the drop in AXA SA's long position.| AUTO TRADER vs. Tencent Holdings | AUTO TRADER vs. Superior Plus Corp | AUTO TRADER vs. SIVERS SEMICONDUCTORS AB | AUTO TRADER vs. NorAm Drilling AS |
| AXA SA vs. QURATE RETAIL INC | AXA SA vs. Cleanaway Waste Management | AXA SA vs. Carsales | AXA SA vs. AUTO TRADER ADR |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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