Correlation Between Autosports and Capricorn Metals
Can any of the company-specific risk be diversified away by investing in both Autosports and Capricorn Metals 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 Capricorn Metals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Autosports Group and Capricorn Metals, you can compare the effects of market volatilities on Autosports and Capricorn Metals 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 Capricorn Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Autosports and Capricorn Metals.
Diversification Opportunities for Autosports and Capricorn Metals
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Autosports and Capricorn is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Autosports Group and Capricorn Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Capricorn Metals 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 Capricorn Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Capricorn Metals has no effect on the direction of Autosports i.e., Autosports and Capricorn Metals go up and down completely randomly.
Pair Corralation between Autosports and Capricorn Metals
Assuming the 90 days trading horizon Autosports is expected to generate 7.98 times less return on investment than Capricorn Metals. But when comparing it to its historical volatility, Autosports Group is 1.42 times less risky than Capricorn Metals. It trades about 0.01 of its potential returns per unit of risk. Capricorn Metals is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 515.00 in Capricorn Metals on October 7, 2024 and sell it today you would earn a total of 132.00 from holding Capricorn Metals or generate 25.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Autosports Group vs. Capricorn Metals
Performance |
| Timeline |
| Autosports Group |
| Capricorn Metals |
Autosports and Capricorn Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Autosports and Capricorn Metals
The main advantage of trading using opposite Autosports and Capricorn Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Autosports position performs unexpectedly, Capricorn Metals 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 Capricorn Metals will offset losses from the drop in Capricorn Metals' long position.| Autosports vs. Globe Metals Mining | Autosports vs. Mayfield Childcare | Autosports vs. Evolution Mining | Autosports vs. Sayona Mining |
| Capricorn Metals vs. ABACUS STORAGE KING | Capricorn Metals vs. Aeon Metals | Capricorn Metals vs. Perseus Mining | Capricorn Metals vs. Truscott Mining Corp |
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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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