Correlation Between Autosports and Ansell
Can any of the company-specific risk be diversified away by investing in both Autosports and Ansell 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 Autosports and Ansell into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Autosports Group and Ansell, you can compare the effects of market volatilities on Autosports and Ansell 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 Autosports with a short position of Ansell. Check out your portfolio center. Please also check ongoing floating volatility patterns of Autosports and Ansell.
Diversification Opportunities for Autosports and Ansell
-0.08 | Correlation Coefficient |
Good diversification
The 3 months correlation between Autosports and Ansell is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Autosports Group and Ansell in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ansell and Autosports 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 Autosports Group are associated (or correlated) with Ansell. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ansell has no effect on the direction of Autosports i.e., Autosports and Ansell go up and down completely randomly.
Pair Corralation between Autosports and Ansell
Assuming the 90 days trading horizon Autosports Group is expected to under-perform the Ansell. In addition to that, Autosports is 1.13 times more volatile than Ansell. It trades about -0.56 of its total potential returns per unit of risk. Ansell is currently generating about 0.14 per unit of volatility. If you would invest 3,172 in Ansell on August 30, 2024 and sell it today you would earn a total of 135.00 from holding Ansell or generate 4.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Autosports Group vs. Ansell
Performance |
| Timeline |
| Autosports Group |
| Ansell |
Autosports and Ansell Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Autosports and Ansell
The main advantage of trading using opposite Autosports and Ansell positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Autosports position performs unexpectedly, Ansell 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 Ansell will offset losses from the drop in Ansell's long position.| Autosports vs. Jupiter Energy | Autosports vs. WA1 Resources | Autosports vs. Predictive Discovery | Autosports vs. Cooper Metals |
| Ansell vs. Hutchison Telecommunications | Ansell vs. Tombador Iron | Ansell vs. Autosports Group | Ansell vs. Qbe Insurance 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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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