Correlation Between WIMFARM SA and AutoNation
Can any of the company-specific risk be diversified away by investing in both WIMFARM SA and AutoNation 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 WIMFARM SA and AutoNation into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between WIMFARM SA EO and AutoNation, you can compare the effects of market volatilities on WIMFARM SA and AutoNation 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 WIMFARM SA with a short position of AutoNation. Check out your portfolio center. Please also check ongoing floating volatility patterns of WIMFARM SA and AutoNation.
Diversification Opportunities for WIMFARM SA and AutoNation
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between WIMFARM and AutoNation is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding WIMFARM SA EO and AutoNation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AutoNation and WIMFARM SA 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 WIMFARM SA EO are associated (or correlated) with AutoNation. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AutoNation has no effect on the direction of WIMFARM SA i.e., WIMFARM SA and AutoNation go up and down completely randomly.
Pair Corralation between WIMFARM SA and AutoNation
Assuming the 90 days horizon WIMFARM SA is expected to generate 7.04 times less return on investment than AutoNation. In addition to that, WIMFARM SA is 2.82 times more volatile than AutoNation. It trades about 0.01 of its total potential returns per unit of risk. AutoNation is currently generating about 0.22 per unit of volatility. If you would invest 15,025 in AutoNation on November 6, 2024 and sell it today you would earn a total of 3,395 from holding AutoNation or generate 22.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 96.67% |
| Values | Daily Returns |
WIMFARM SA EO vs. AutoNation
Performance |
| Timeline |
| WIMFARM SA EO |
| AutoNation |
WIMFARM SA and AutoNation Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with WIMFARM SA and AutoNation
The main advantage of trading using opposite WIMFARM SA and AutoNation positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WIMFARM SA position performs unexpectedly, AutoNation 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 AutoNation will offset losses from the drop in AutoNation's long position.| WIMFARM SA vs. Pebblebrook Hotel Trust | WIMFARM SA vs. Sunstone Hotel Investors | WIMFARM SA vs. China Resources Beer | WIMFARM SA vs. HYATT HOTELS A |
| AutoNation vs. US Physical Therapy | AutoNation vs. IDP EDUCATION LTD | AutoNation vs. Ares Management Corp | AutoNation vs. STRAYER EDUCATION |
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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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