Correlation Between Automotive Finco and Xtract One
Can any of the company-specific risk be diversified away by investing in both Automotive Finco and Xtract One 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 Xtract One 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 Xtract One Technologies, you can compare the effects of market volatilities on Automotive Finco and Xtract One 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 Xtract One. Check out your portfolio center. Please also check ongoing floating volatility patterns of Automotive Finco and Xtract One.
Diversification Opportunities for Automotive Finco and Xtract One
-0.06 | Correlation Coefficient |
Good diversification
The 3 months correlation between Automotive and Xtract is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding Automotive Finco Corp and Xtract One Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xtract One Technologies 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 Xtract One. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xtract One Technologies has no effect on the direction of Automotive Finco i.e., Automotive Finco and Xtract One go up and down completely randomly.
Pair Corralation between Automotive Finco and Xtract One
Assuming the 90 days trading horizon Automotive Finco Corp is expected to generate 0.56 times more return on investment than Xtract One. However, Automotive Finco Corp is 1.78 times less risky than Xtract One. It trades about 0.19 of its potential returns per unit of risk. Xtract One Technologies is currently generating about -0.2 per unit of risk. If you would invest 76.00 in Automotive Finco Corp on September 14, 2024 and sell it today you would earn a total of 10.00 from holding Automotive Finco Corp or generate 13.16% 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. Xtract One Technologies
Performance |
| Timeline |
| Automotive Finco Corp |
| Xtract One Technologies |
Automotive Finco and Xtract One Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Automotive Finco and Xtract One
The main advantage of trading using opposite Automotive Finco and Xtract One positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Automotive Finco position performs unexpectedly, Xtract One 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 Xtract One will offset losses from the drop in Xtract One's long position.| Automotive Finco vs. Berkshire Hathaway CDR | Automotive Finco vs. JPMorgan Chase Co | Automotive Finco vs. Bank of America | Automotive Finco vs. Alphabet Inc CDR |
| Xtract One vs. Adcore Inc | Xtract One vs. Emerge Commerce | Xtract One vs. Quisitive Technology Solutions | Xtract One vs. DGTL Holdings |
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.
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