Correlation Between Automatic Data and Superior Plus
Can any of the company-specific risk be diversified away by investing in both Automatic Data and Superior Plus 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 Superior Plus 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 Superior Plus Corp, you can compare the effects of market volatilities on Automatic Data and Superior Plus 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 Superior Plus. Check out your portfolio center. Please also check ongoing floating volatility patterns of Automatic Data and Superior Plus.
Diversification Opportunities for Automatic Data and Superior Plus
-0.85 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Automatic and Superior is -0.85. Overlapping area represents the amount of risk that can be diversified away by holding Automatic Data Processing and Superior Plus Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Superior Plus Corp 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 Superior Plus. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Superior Plus Corp has no effect on the direction of Automatic Data i.e., Automatic Data and Superior Plus go up and down completely randomly.
Pair Corralation between Automatic Data and Superior Plus
Assuming the 90 days horizon Automatic Data Processing is expected to generate 0.42 times more return on investment than Superior Plus. However, Automatic Data Processing is 2.37 times less risky than Superior Plus. It trades about 0.18 of its potential returns per unit of risk. Superior Plus Corp is currently generating about -0.07 per unit of risk. If you would invest 22,272 in Automatic Data Processing on September 1, 2024 and sell it today you would earn a total of 6,838 from holding Automatic Data Processing or generate 30.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Automatic Data Processing vs. Superior Plus Corp
Performance |
| Timeline |
| Automatic Data Processing |
| Superior Plus Corp |
Automatic Data and Superior Plus Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Automatic Data and Superior Plus
The main advantage of trading using opposite Automatic Data and Superior Plus positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Automatic Data position performs unexpectedly, Superior Plus 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 Superior Plus will offset losses from the drop in Superior Plus' long position.| Automatic Data vs. Global Ship Lease | Automatic Data vs. BOSTON BEER A | Automatic Data vs. National Beverage Corp | Automatic Data vs. Digilife Technologies Limited |
| Superior Plus vs. TSOGO SUN GAMING | Superior Plus vs. FUTURE GAMING GRP | Superior Plus vs. TROPHY GAMES DEV | Superior Plus vs. Boyd Gaming |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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