Correlation Between Advance Auto and Mobly SA
Can any of the company-specific risk be diversified away by investing in both Advance Auto and Mobly SA 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 Advance Auto and Mobly SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Advance Auto Parts and Mobly SA, you can compare the effects of market volatilities on Advance Auto and Mobly SA 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 Advance Auto with a short position of Mobly SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Advance Auto and Mobly SA.
Diversification Opportunities for Advance Auto and Mobly SA
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Advance and Mobly is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Advance Auto Parts and Mobly SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mobly SA and Advance Auto 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 Advance Auto Parts are associated (or correlated) with Mobly SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mobly SA has no effect on the direction of Advance Auto i.e., Advance Auto and Mobly SA go up and down completely randomly.
Pair Corralation between Advance Auto and Mobly SA
Assuming the 90 days trading horizon Advance Auto Parts is expected to generate 1.15 times more return on investment than Mobly SA. However, Advance Auto is 1.15 times more volatile than Mobly SA. It trades about 0.18 of its potential returns per unit of risk. Mobly SA is currently generating about -0.34 per unit of risk. If you would invest 1,427 in Advance Auto Parts on September 13, 2024 and sell it today you would earn a total of 213.00 from holding Advance Auto Parts or generate 14.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Advance Auto Parts vs. Mobly SA
Performance |
| Timeline |
| Advance Auto Parts |
| Mobly SA |
Advance Auto and Mobly SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Advance Auto and Mobly SA
The main advantage of trading using opposite Advance Auto and Mobly SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Advance Auto position performs unexpectedly, Mobly SA 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 Mobly SA will offset losses from the drop in Mobly SA's long position.| Advance Auto vs. Mliuz SA | Advance Auto vs. Natura Co Holding | Advance Auto vs. Rede DOr So | Advance Auto vs. Locaweb Servios de |
| Mobly SA vs. Enjoei SA | Mobly SA vs. Westwing Comrcio Varejista | Mobly SA vs. Intelbras SA | Mobly SA vs. Bemobi Mobile Tech |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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