Correlation Between KOOL2PLAY and Auto Trader
Can any of the company-specific risk be diversified away by investing in both KOOL2PLAY 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 KOOL2PLAY and Auto Trader into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between KOOL2PLAY SA ZY and Auto Trader Group, you can compare the effects of market volatilities on KOOL2PLAY 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 KOOL2PLAY with a short position of Auto Trader. Check out your portfolio center. Please also check ongoing floating volatility patterns of KOOL2PLAY and Auto Trader.
Diversification Opportunities for KOOL2PLAY and Auto Trader
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between KOOL2PLAY and Auto is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding KOOL2PLAY SA ZY and Auto Trader Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Auto Trader Group and KOOL2PLAY 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 KOOL2PLAY SA ZY 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 Group has no effect on the direction of KOOL2PLAY i.e., KOOL2PLAY and Auto Trader go up and down completely randomly.
Pair Corralation between KOOL2PLAY and Auto Trader
Assuming the 90 days horizon KOOL2PLAY SA ZY is expected to generate 3.27 times more return on investment than Auto Trader. However, KOOL2PLAY is 3.27 times more volatile than Auto Trader Group. It trades about 0.09 of its potential returns per unit of risk. Auto Trader Group is currently generating about 0.14 per unit of risk. If you would invest 17.00 in KOOL2PLAY SA ZY on September 19, 2024 and sell it today you would earn a total of 1.00 from holding KOOL2PLAY SA ZY or generate 5.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
KOOL2PLAY SA ZY vs. Auto Trader Group
Performance |
| Timeline |
| KOOL2PLAY SA ZY |
| Auto Trader Group |
KOOL2PLAY and Auto Trader Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KOOL2PLAY and Auto Trader
The main advantage of trading using opposite KOOL2PLAY and Auto Trader positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KOOL2PLAY 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.| KOOL2PLAY vs. Siamgas And Petrochemicals | KOOL2PLAY vs. CarsalesCom | KOOL2PLAY vs. KINGBOARD CHEMICAL | KOOL2PLAY vs. Sanyo Chemical Industries |
| Auto Trader vs. GungHo Online Entertainment | Auto Trader vs. SCANSOURCE | Auto Trader vs. YATRA ONLINE DL 0001 | Auto Trader vs. PPHE HOTEL GROUP |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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