Correlation Between AUTO TRADER and Glaston Oyj
Can any of the company-specific risk be diversified away by investing in both AUTO TRADER and Glaston Oyj 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 Glaston Oyj 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 Glaston Oyj Abp, you can compare the effects of market volatilities on AUTO TRADER and Glaston Oyj 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 Glaston Oyj. Check out your portfolio center. Please also check ongoing floating volatility patterns of AUTO TRADER and Glaston Oyj.
Diversification Opportunities for AUTO TRADER and Glaston Oyj
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between AUTO and Glaston is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding AUTO TRADER ADR and Glaston Oyj Abp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Glaston Oyj Abp 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 Glaston Oyj. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Glaston Oyj Abp has no effect on the direction of AUTO TRADER i.e., AUTO TRADER and Glaston Oyj go up and down completely randomly.
Pair Corralation between AUTO TRADER and Glaston Oyj
Assuming the 90 days trading horizon AUTO TRADER ADR is expected to generate 0.37 times more return on investment than Glaston Oyj. However, AUTO TRADER ADR is 2.71 times less risky than Glaston Oyj. It trades about 0.29 of its potential returns per unit of risk. Glaston Oyj Abp is currently generating about 0.01 per unit of risk. If you would invest 232.00 in AUTO TRADER ADR on September 13, 2024 and sell it today you would earn a total of 14.00 from holding AUTO TRADER ADR or generate 6.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
AUTO TRADER ADR vs. Glaston Oyj Abp
Performance |
| Timeline |
| AUTO TRADER ADR |
| Glaston Oyj Abp |
AUTO TRADER and Glaston Oyj Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AUTO TRADER and Glaston Oyj
The main advantage of trading using opposite AUTO TRADER and Glaston Oyj positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AUTO TRADER position performs unexpectedly, Glaston Oyj 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 Glaston Oyj will offset losses from the drop in Glaston Oyj'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 |
| Glaston Oyj vs. Grupo Carso SAB | Glaston Oyj vs. AUTO TRADER ADR | Glaston Oyj vs. Commercial Vehicle Group | Glaston Oyj vs. Salesforce |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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