Correlation Between Automatic Data and MOVIE GAMES
Can any of the company-specific risk be diversified away by investing in both Automatic Data and MOVIE GAMES 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 Automatic Data and MOVIE GAMES into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Automatic Data Processing and MOVIE GAMES SA, you can compare the effects of market volatilities on Automatic Data and MOVIE GAMES 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 Automatic Data with a short position of MOVIE GAMES. Check out your portfolio center. Please also check ongoing floating volatility patterns of Automatic Data and MOVIE GAMES.
Diversification Opportunities for Automatic Data and MOVIE GAMES
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Automatic and MOVIE is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Automatic Data Processing and MOVIE GAMES SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MOVIE GAMES SA and Automatic Data 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 Automatic Data Processing are associated (or correlated) with MOVIE GAMES. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MOVIE GAMES SA has no effect on the direction of Automatic Data i.e., Automatic Data and MOVIE GAMES go up and down completely randomly.
Pair Corralation between Automatic Data and MOVIE GAMES
Assuming the 90 days horizon Automatic Data is expected to generate 60.1 times less return on investment than MOVIE GAMES. But when comparing it to its historical volatility, Automatic Data Processing is 5.81 times less risky than MOVIE GAMES. It trades about 0.02 of its potential returns per unit of risk. MOVIE GAMES SA is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest 300.00 in MOVIE GAMES SA on October 19, 2024 and sell it today you would earn a total of 83.00 from holding MOVIE GAMES SA or generate 27.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 94.44% |
| Values | Daily Returns |
Automatic Data Processing vs. MOVIE GAMES SA
Performance |
| Timeline |
| Automatic Data Processing |
| MOVIE GAMES SA |
Automatic Data and MOVIE GAMES Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Automatic Data and MOVIE GAMES
The main advantage of trading using opposite Automatic Data and MOVIE GAMES positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Automatic Data position performs unexpectedly, MOVIE GAMES 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 MOVIE GAMES will offset losses from the drop in MOVIE GAMES's long position.| Automatic Data vs. Medical Properties Trust | Automatic Data vs. Inspire Medical Systems | Automatic Data vs. Advanced Medical Solutions | Automatic Data vs. Apollo Investment Corp |
| MOVIE GAMES vs. Alliance Data Systems | MOVIE GAMES vs. Automatic Data Processing | MOVIE GAMES vs. DATATEC LTD 2 | MOVIE GAMES vs. China Datang |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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