Correlation Between Automatic Data and ConocoPhillips
Can any of the company-specific risk be diversified away by investing in both Automatic Data and ConocoPhillips 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 ConocoPhillips 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 ConocoPhillips, you can compare the effects of market volatilities on Automatic Data and ConocoPhillips 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 ConocoPhillips. Check out your portfolio center. Please also check ongoing floating volatility patterns of Automatic Data and ConocoPhillips.
Diversification Opportunities for Automatic Data and ConocoPhillips
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between Automatic and ConocoPhillips is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Automatic Data Processing and ConocoPhillips in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ConocoPhillips 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 ConocoPhillips. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ConocoPhillips has no effect on the direction of Automatic Data i.e., Automatic Data and ConocoPhillips go up and down completely randomly.
Pair Corralation between Automatic Data and ConocoPhillips
Assuming the 90 days horizon Automatic Data is expected to generate 3.02 times less return on investment than ConocoPhillips. But when comparing it to its historical volatility, Automatic Data Processing is 1.33 times less risky than ConocoPhillips. It trades about 0.2 of its potential returns per unit of risk. ConocoPhillips is currently generating about 0.46 of returns per unit of risk over similar time horizon. If you would invest 9,232 in ConocoPhillips on October 20, 2024 and sell it today you would earn a total of 1,018 from holding ConocoPhillips or generate 11.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Automatic Data Processing vs. ConocoPhillips
Performance |
| Timeline |
| Automatic Data Processing |
| ConocoPhillips |
Automatic Data and ConocoPhillips Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Automatic Data and ConocoPhillips
The main advantage of trading using opposite Automatic Data and ConocoPhillips positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Automatic Data position performs unexpectedly, ConocoPhillips 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 ConocoPhillips will offset losses from the drop in ConocoPhillips' long position.| Automatic Data vs. Richardson Electronics | Automatic Data vs. Nucletron Electronic Aktiengesellschaft | Automatic Data vs. Benchmark Electronics | Automatic Data vs. CODERE ONLINE LUX |
| ConocoPhillips vs. INTERSHOP Communications Aktiengesellschaft | ConocoPhillips vs. Singapore Telecommunications Limited | ConocoPhillips vs. Comba Telecom Systems | ConocoPhillips vs. AIR PRODCHEMICALS |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
Other Complementary Tools
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| CEOs Directory Screen CEOs from public companies around the world | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities |