Correlation Between Ampol and Autosports
Can any of the company-specific risk be diversified away by investing in both Ampol and Autosports 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 Ampol and Autosports into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ampol and Autosports Group, you can compare the effects of market volatilities on Ampol and Autosports 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 Ampol with a short position of Autosports. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ampol and Autosports.
Diversification Opportunities for Ampol and Autosports
-0.11 | Correlation Coefficient |
Good diversification
The 3 months correlation between Ampol and Autosports is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding Ampol and Autosports Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Autosports Group and Ampol 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 Ampol are associated (or correlated) with Autosports. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Autosports Group has no effect on the direction of Ampol i.e., Ampol and Autosports go up and down completely randomly.
Pair Corralation between Ampol and Autosports
Assuming the 90 days trading horizon Ampol is expected to generate 1.25 times more return on investment than Autosports. However, Ampol is 1.25 times more volatile than Autosports Group. It trades about 0.06 of its potential returns per unit of risk. Autosports Group is currently generating about -0.5 per unit of risk. If you would invest 2,802 in Ampol on September 4, 2024 and sell it today you would earn a total of 56.00 from holding Ampol or generate 2.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ampol vs. Autosports Group
Performance |
| Timeline |
| Ampol |
| Autosports Group |
Ampol and Autosports Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ampol and Autosports
The main advantage of trading using opposite Ampol and Autosports positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ampol position performs unexpectedly, Autosports 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 Autosports will offset losses from the drop in Autosports' long position.| Ampol vs. Leeuwin Metals | Ampol vs. Strickland Metals | Ampol vs. Aussie Broadband | Ampol vs. Centaurus Metals |
| Autosports vs. Aneka Tambang Tbk | Autosports vs. BHP Group Limited | Autosports vs. Commonwealth Bank | Autosports vs. Commonwealth Bank of |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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