Correlation Between Automatic Data and INDIKA ENERGY
Can any of the company-specific risk be diversified away by investing in both Automatic Data and INDIKA ENERGY 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 INDIKA ENERGY 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 INDIKA ENERGY, you can compare the effects of market volatilities on Automatic Data and INDIKA ENERGY 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 INDIKA ENERGY. Check out your portfolio center. Please also check ongoing floating volatility patterns of Automatic Data and INDIKA ENERGY.
Diversification Opportunities for Automatic Data and INDIKA ENERGY
-0.78 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Automatic and INDIKA is -0.78. Overlapping area represents the amount of risk that can be diversified away by holding Automatic Data Processing and INDIKA ENERGY in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on INDIKA ENERGY 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 INDIKA ENERGY. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of INDIKA ENERGY has no effect on the direction of Automatic Data i.e., Automatic Data and INDIKA ENERGY go up and down completely randomly.
Pair Corralation between Automatic Data and INDIKA ENERGY
Assuming the 90 days horizon Automatic Data Processing is expected to generate 0.35 times more return on investment than INDIKA ENERGY. However, Automatic Data Processing is 2.85 times less risky than INDIKA ENERGY. It trades about 0.18 of its potential returns per unit of risk. INDIKA ENERGY is currently generating about 0.05 per unit of risk. If you would invest 21,972 in Automatic Data Processing on September 25, 2024 and sell it today you would earn a total of 6,243 from holding Automatic Data Processing or generate 28.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 99.22% |
| Values | Daily Returns |
Automatic Data Processing vs. INDIKA ENERGY
Performance |
| Timeline |
| Automatic Data Processing |
| INDIKA ENERGY |
Automatic Data and INDIKA ENERGY Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Automatic Data and INDIKA ENERGY
The main advantage of trading using opposite Automatic Data and INDIKA ENERGY positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Automatic Data position performs unexpectedly, INDIKA ENERGY 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 INDIKA ENERGY will offset losses from the drop in INDIKA ENERGY's long position.| Automatic Data vs. Fiserv Inc | Automatic Data vs. Paychex | Automatic Data vs. Experian plc | Automatic Data vs. Verisk Analytics |
| INDIKA ENERGY vs. Apple Inc | INDIKA ENERGY vs. Apple Inc | INDIKA ENERGY vs. Apple Inc | INDIKA ENERGY vs. Microsoft |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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