Correlation Between Aston Martin and SPACE
Can any of the company-specific risk be diversified away by investing in both Aston Martin and SPACE 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 Aston Martin and SPACE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aston Martin Lagonda and SPACE, you can compare the effects of market volatilities on Aston Martin and SPACE 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 Aston Martin with a short position of SPACE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aston Martin and SPACE.
Diversification Opportunities for Aston Martin and SPACE
-0.2 | Correlation Coefficient |
Good diversification
The 3 months correlation between Aston and SPACE is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding Aston Martin Lagonda and SPACE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPACE and Aston Martin 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 Aston Martin Lagonda are associated (or correlated) with SPACE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SPACE has no effect on the direction of Aston Martin i.e., Aston Martin and SPACE go up and down completely randomly.
Pair Corralation between Aston Martin and SPACE
Assuming the 90 days horizon Aston Martin Lagonda is expected to under-perform the SPACE. But the pink sheet apears to be less risky and, when comparing its historical volatility, Aston Martin Lagonda is 2.04 times less risky than SPACE. The pink sheet trades about -0.01 of its potential returns per unit of risk. The SPACE is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 39.00 in SPACE on October 25, 2024 and sell it today you would earn a total of 0.00 from holding SPACE or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 92.19% |
| Values | Daily Returns |
Aston Martin Lagonda vs. SPACE
Performance |
| Timeline |
| Aston Martin Lagonda |
| SPACE |
Aston Martin and SPACE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aston Martin and SPACE
The main advantage of trading using opposite Aston Martin and SPACE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aston Martin position performs unexpectedly, SPACE 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 SPACE will offset losses from the drop in SPACE's long position.| Aston Martin vs. Geely Automobile Holdings | Aston Martin vs. Guangzhou Automobile Group | Aston Martin vs. Dowlais Group plc | Aston Martin vs. NFI Group |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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