Correlation Between AutoCanada and D’Ieteren
Can any of the company-specific risk be diversified away by investing in both AutoCanada and D’Ieteren 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 AutoCanada and D’Ieteren into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AutoCanada and DIeteren NV ADR, you can compare the effects of market volatilities on AutoCanada and D’Ieteren 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 AutoCanada with a short position of D’Ieteren. Check out your portfolio center. Please also check ongoing floating volatility patterns of AutoCanada and D’Ieteren.
Diversification Opportunities for AutoCanada and D’Ieteren
-0.65 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between AutoCanada and D’Ieteren is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding AutoCanada and DIeteren NV ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DIeteren NV ADR and AutoCanada 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 AutoCanada are associated (or correlated) with D’Ieteren. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DIeteren NV ADR has no effect on the direction of AutoCanada i.e., AutoCanada and D’Ieteren go up and down completely randomly.
Pair Corralation between AutoCanada and D’Ieteren
Assuming the 90 days horizon AutoCanada is expected to generate 2.55 times less return on investment than D’Ieteren. In addition to that, AutoCanada is 1.75 times more volatile than DIeteren NV ADR. It trades about 0.01 of its total potential returns per unit of risk. DIeteren NV ADR is currently generating about 0.06 per unit of volatility. If you would invest 8,626 in DIeteren NV ADR on September 4, 2024 and sell it today you would earn a total of 2,178 from holding DIeteren NV ADR or generate 25.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 78.95% |
| Values | Daily Returns |
AutoCanada vs. DIeteren NV ADR
Performance |
| Timeline |
| AutoCanada |
| DIeteren NV ADR |
AutoCanada and D’Ieteren Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AutoCanada and D’Ieteren
The main advantage of trading using opposite AutoCanada and D’Ieteren positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AutoCanada position performs unexpectedly, D’Ieteren 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 D’Ieteren will offset losses from the drop in D’Ieteren's long position.| AutoCanada vs. Arhaus Inc | AutoCanada vs. Floor Decor Holdings | AutoCanada vs. Live Ventures | AutoCanada vs. Cisco Systems |
| D’Ieteren vs. Consumer Automotive Finance | D’Ieteren vs. Vroom Inc | D’Ieteren vs. AutoCanada | D’Ieteren vs. Kaixin Auto 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
Other Complementary Tools
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments |