Correlation Between Asara Resources and Autosports
Can any of the company-specific risk be diversified away by investing in both Asara Resources 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 Asara Resources and Autosports into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Asara Resources and Autosports Group, you can compare the effects of market volatilities on Asara Resources 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 Asara Resources with a short position of Autosports. Check out your portfolio center. Please also check ongoing floating volatility patterns of Asara Resources and Autosports.
Diversification Opportunities for Asara Resources and Autosports
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Asara and Autosports is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Asara Resources and Autosports Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Autosports Group and Asara Resources 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 Asara Resources 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 Asara Resources i.e., Asara Resources and Autosports go up and down completely randomly.
Pair Corralation between Asara Resources and Autosports
Assuming the 90 days trading horizon Asara Resources is expected to generate 7.02 times more return on investment than Autosports. However, Asara Resources is 7.02 times more volatile than Autosports Group. It trades about 0.18 of its potential returns per unit of risk. Autosports Group is currently generating about -0.2 per unit of risk. If you would invest 1.80 in Asara Resources on November 3, 2024 and sell it today you would earn a total of 0.50 from holding Asara Resources or generate 27.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Asara Resources vs. Autosports Group
Performance |
| Timeline |
| Asara Resources |
| Autosports Group |
Asara Resources and Autosports Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Asara Resources and Autosports
The main advantage of trading using opposite Asara Resources and Autosports positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Asara Resources 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.| Asara Resources vs. Perseus Mining | Asara Resources vs. Centaurus Metals | Asara Resources vs. FireFly Metals | Asara Resources vs. Dalaroo Metals |
| Autosports vs. MetalsGrove Mining | Autosports vs. Data3 | Autosports vs. Centaurus Metals | Autosports vs. Computershare |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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