Correlation Between Automotive Finco and Signal Gold
Can any of the company-specific risk be diversified away by investing in both Automotive Finco and Signal Gold 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 Automotive Finco and Signal Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Automotive Finco Corp and Signal Gold, you can compare the effects of market volatilities on Automotive Finco and Signal Gold 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 Automotive Finco with a short position of Signal Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Automotive Finco and Signal Gold.
Diversification Opportunities for Automotive Finco and Signal Gold
-0.2 | Correlation Coefficient |
Good diversification
The 3 months correlation between Automotive and Signal is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding Automotive Finco Corp and Signal Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Signal Gold and Automotive Finco 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 Automotive Finco Corp are associated (or correlated) with Signal Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Signal Gold has no effect on the direction of Automotive Finco i.e., Automotive Finco and Signal Gold go up and down completely randomly.
Pair Corralation between Automotive Finco and Signal Gold
Assuming the 90 days trading horizon Automotive Finco Corp is expected to generate 0.94 times more return on investment than Signal Gold. However, Automotive Finco Corp is 1.06 times less risky than Signal Gold. It trades about 0.07 of its potential returns per unit of risk. Signal Gold is currently generating about -0.02 per unit of risk. If you would invest 50.00 in Automotive Finco Corp on September 1, 2024 and sell it today you would earn a total of 39.00 from holding Automotive Finco Corp or generate 78.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Automotive Finco Corp vs. Signal Gold
Performance |
| Timeline |
| Automotive Finco Corp |
| Signal Gold |
Automotive Finco and Signal Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Automotive Finco and Signal Gold
The main advantage of trading using opposite Automotive Finco and Signal Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Automotive Finco position performs unexpectedly, Signal Gold 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 Signal Gold will offset losses from the drop in Signal Gold's long position.| Automotive Finco vs. Royal Bank of | Automotive Finco vs. Royal Bank of | Automotive Finco vs. Royal Bank of | Automotive Finco vs. Toronto Dominion Bank Pref |
| Signal Gold vs. Montage Gold Corp | Signal Gold vs. Cerrado Gold Corp | Signal Gold vs. Steppe Gold | Signal Gold vs. Maritime Resources Corp |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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