Correlation Between Automatic Data and TRADEGATE
Can any of the company-specific risk be diversified away by investing in both Automatic Data and TRADEGATE 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 TRADEGATE 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 TRADEGATE, you can compare the effects of market volatilities on Automatic Data and TRADEGATE 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 TRADEGATE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Automatic Data and TRADEGATE.
Diversification Opportunities for Automatic Data and TRADEGATE
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Automatic and TRADEGATE is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Automatic Data Processing and TRADEGATE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TRADEGATE 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 TRADEGATE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TRADEGATE has no effect on the direction of Automatic Data i.e., Automatic Data and TRADEGATE go up and down completely randomly.
Pair Corralation between Automatic Data and TRADEGATE
Assuming the 90 days horizon Automatic Data Processing is expected to generate 1.51 times more return on investment than TRADEGATE. However, Automatic Data is 1.51 times more volatile than TRADEGATE. It trades about 0.07 of its potential returns per unit of risk. TRADEGATE is currently generating about -0.04 per unit of risk. If you would invest 20,031 in Automatic Data Processing on November 5, 2024 and sell it today you would earn a total of 9,184 from holding Automatic Data Processing or generate 45.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Automatic Data Processing vs. TRADEGATE
Performance |
| Timeline |
| Automatic Data Processing |
| TRADEGATE |
Automatic Data and TRADEGATE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Automatic Data and TRADEGATE
The main advantage of trading using opposite Automatic Data and TRADEGATE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Automatic Data position performs unexpectedly, TRADEGATE 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 TRADEGATE will offset losses from the drop in TRADEGATE's long position.| Automatic Data vs. WillScot Mobile Mini | Automatic Data vs. EIDESVIK OFFSHORE NK | Automatic Data vs. COMBA TELECOM SYST | Automatic Data vs. TELECOM ITALIA |
| TRADEGATE vs. Check Point Software | TRADEGATE vs. Harmony Gold Mining | TRADEGATE vs. DISTRICT METALS | TRADEGATE vs. Western Copper and |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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