Correlation Between AUTO TRADER and EIDESVIK OFFSHORE
Can any of the company-specific risk be diversified away by investing in both AUTO TRADER and EIDESVIK OFFSHORE 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 EIDESVIK OFFSHORE 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 EIDESVIK OFFSHORE NK, you can compare the effects of market volatilities on AUTO TRADER and EIDESVIK OFFSHORE 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 EIDESVIK OFFSHORE. Check out your portfolio center. Please also check ongoing floating volatility patterns of AUTO TRADER and EIDESVIK OFFSHORE.
Diversification Opportunities for AUTO TRADER and EIDESVIK OFFSHORE
-0.11 | Correlation Coefficient |
Good diversification
The 3 months correlation between AUTO and EIDESVIK is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding AUTO TRADER ADR and EIDESVIK OFFSHORE NK in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EIDESVIK OFFSHORE 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 EIDESVIK OFFSHORE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EIDESVIK OFFSHORE has no effect on the direction of AUTO TRADER i.e., AUTO TRADER and EIDESVIK OFFSHORE go up and down completely randomly.
Pair Corralation between AUTO TRADER and EIDESVIK OFFSHORE
Assuming the 90 days trading horizon AUTO TRADER ADR is expected to generate 0.65 times more return on investment than EIDESVIK OFFSHORE. However, AUTO TRADER ADR is 1.54 times less risky than EIDESVIK OFFSHORE. It trades about 0.0 of its potential returns per unit of risk. EIDESVIK OFFSHORE NK is currently generating about -0.06 per unit of risk. If you would invest 233.00 in AUTO TRADER ADR on November 30, 2024 and sell it today you would lose (1.00) from holding AUTO TRADER ADR or give up 0.43% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 97.67% |
| Values | Daily Returns |
AUTO TRADER ADR vs. EIDESVIK OFFSHORE NK
Performance |
| Timeline |
| AUTO TRADER ADR |
| EIDESVIK OFFSHORE |
AUTO TRADER and EIDESVIK OFFSHORE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AUTO TRADER and EIDESVIK OFFSHORE
The main advantage of trading using opposite AUTO TRADER and EIDESVIK OFFSHORE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AUTO TRADER position performs unexpectedly, EIDESVIK OFFSHORE 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 EIDESVIK OFFSHORE will offset losses from the drop in EIDESVIK OFFSHORE's long position.| AUTO TRADER vs. AGNC Investment Corp | AUTO TRADER vs. Apollo Investment Corp | AUTO TRADER vs. Ubisoft Entertainment SA | AUTO TRADER vs. ATRESMEDIA |
| EIDESVIK OFFSHORE vs. Eskay Mining Corp | EIDESVIK OFFSHORE vs. Ringmetall SE | EIDESVIK OFFSHORE vs. BORR DRILLING NEW | EIDESVIK OFFSHORE vs. East Africa Metals |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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