Correlation Between Automatic Data and GP Investments
Can any of the company-specific risk be diversified away by investing in both Automatic Data and GP Investments 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 GP Investments 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 GP Investments, you can compare the effects of market volatilities on Automatic Data and GP Investments 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 GP Investments. Check out your portfolio center. Please also check ongoing floating volatility patterns of Automatic Data and GP Investments.
Diversification Opportunities for Automatic Data and GP Investments
-0.57 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Automatic and GPIV33 is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Automatic Data Processing and GP Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GP Investments 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 GP Investments. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GP Investments has no effect on the direction of Automatic Data i.e., Automatic Data and GP Investments go up and down completely randomly.
Pair Corralation between Automatic Data and GP Investments
Assuming the 90 days trading horizon Automatic Data Processing is expected to generate 0.66 times more return on investment than GP Investments. However, Automatic Data Processing is 1.51 times less risky than GP Investments. It trades about 0.36 of its potential returns per unit of risk. GP Investments is currently generating about -0.07 per unit of risk. If you would invest 6,902 in Automatic Data Processing on September 1, 2024 and sell it today you would earn a total of 754.00 from holding Automatic Data Processing or generate 10.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Automatic Data Processing vs. GP Investments
Performance |
| Timeline |
| Automatic Data Processing |
| GP Investments |
Automatic Data and GP Investments Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Automatic Data and GP Investments
The main advantage of trading using opposite Automatic Data and GP Investments positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Automatic Data position performs unexpectedly, GP Investments 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 GP Investments will offset losses from the drop in GP Investments' long position.| Automatic Data vs. Fras le SA | Automatic Data vs. Western Digital | Automatic Data vs. Energisa SA | Automatic Data vs. Clave Indices De |
| GP Investments vs. Banco BTG Pactual | GP Investments vs. Banco BTG Pactual | GP Investments vs. Hsi Malls Fundo | GP Investments vs. Habitat Ii |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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