Correlation Between Suntory Beverage and AUTO TRADER
Can any of the company-specific risk be diversified away by investing in both Suntory Beverage and AUTO TRADER 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 Suntory Beverage and AUTO TRADER into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Suntory Beverage Food and AUTO TRADER ADR, you can compare the effects of market volatilities on Suntory Beverage and AUTO TRADER 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 Suntory Beverage with a short position of AUTO TRADER. Check out your portfolio center. Please also check ongoing floating volatility patterns of Suntory Beverage and AUTO TRADER.
Diversification Opportunities for Suntory Beverage and AUTO TRADER
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Suntory and AUTO is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Suntory Beverage Food and AUTO TRADER ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AUTO TRADER ADR and Suntory Beverage 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 Suntory Beverage Food are associated (or correlated) with AUTO TRADER. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AUTO TRADER ADR has no effect on the direction of Suntory Beverage i.e., Suntory Beverage and AUTO TRADER go up and down completely randomly.
Pair Corralation between Suntory Beverage and AUTO TRADER
Assuming the 90 days horizon Suntory Beverage Food is expected to generate 0.93 times more return on investment than AUTO TRADER. However, Suntory Beverage Food is 1.08 times less risky than AUTO TRADER. It trades about 0.11 of its potential returns per unit of risk. AUTO TRADER ADR is currently generating about 0.03 per unit of risk. If you would invest 3,010 in Suntory Beverage Food on September 2, 2024 and sell it today you would earn a total of 124.00 from holding Suntory Beverage Food or generate 4.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Suntory Beverage Food vs. AUTO TRADER ADR
Performance |
| Timeline |
| Suntory Beverage Food |
| AUTO TRADER ADR |
Suntory Beverage and AUTO TRADER Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Suntory Beverage and AUTO TRADER
The main advantage of trading using opposite Suntory Beverage and AUTO TRADER positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Suntory Beverage position performs unexpectedly, AUTO TRADER 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 AUTO TRADER will offset losses from the drop in AUTO TRADER's long position.| Suntory Beverage vs. Heineken Holding NV | Suntory Beverage vs. Superior Plus Corp | Suntory Beverage vs. NMI Holdings | Suntory Beverage vs. Origin Agritech |
| AUTO TRADER vs. SERI INDUSTRIAL EO | AUTO TRADER vs. Evolution Mining Limited | AUTO TRADER vs. Corporate Travel Management | AUTO TRADER vs. ADRIATIC METALS LS 013355 |
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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