Correlation Between Automatic Data and Seagate Technology
Can any of the company-specific risk be diversified away by investing in both Automatic Data and Seagate Technology 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 Seagate Technology 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 Seagate Technology Holdings, you can compare the effects of market volatilities on Automatic Data and Seagate Technology 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 Seagate Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Automatic Data and Seagate Technology.
Diversification Opportunities for Automatic Data and Seagate Technology
-0.19 | Correlation Coefficient |
Good diversification
The 3 months correlation between Automatic and Seagate is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Automatic Data Processing and Seagate Technology Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Seagate Technology 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 Seagate Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Seagate Technology has no effect on the direction of Automatic Data i.e., Automatic Data and Seagate Technology go up and down completely randomly.
Pair Corralation between Automatic Data and Seagate Technology
Assuming the 90 days trading horizon Automatic Data is expected to generate 7.06 times less return on investment than Seagate Technology. But when comparing it to its historical volatility, Automatic Data Processing is 1.94 times less risky than Seagate Technology. It trades about 0.03 of its potential returns per unit of risk. Seagate Technology Holdings is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 56,775 in Seagate Technology Holdings on October 25, 2024 and sell it today you would earn a total of 6,725 from holding Seagate Technology Holdings or generate 11.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 94.87% |
| Values | Daily Returns |
Automatic Data Processing vs. Seagate Technology Holdings
Performance |
| Timeline |
| Automatic Data Processing |
| Seagate Technology |
Automatic Data and Seagate Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Automatic Data and Seagate Technology
The main advantage of trading using opposite Automatic Data and Seagate Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Automatic Data position performs unexpectedly, Seagate Technology 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 Seagate Technology will offset losses from the drop in Seagate Technology's long position.| Automatic Data vs. Monster Beverage | Automatic Data vs. Autohome | Automatic Data vs. Synchrony Financial | Automatic Data vs. Truist Financial |
| Seagate Technology vs. Patria Investments Limited | Seagate Technology vs. Automatic Data Processing | Seagate Technology vs. Tyson Foods | Seagate Technology vs. United States Steel |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
Other Complementary Tools
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios |