Correlation Between Autosports and EMvision Medical
Can any of the company-specific risk be diversified away by investing in both Autosports and EMvision Medical 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 EMvision Medical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Autosports Group and EMvision Medical Devices, you can compare the effects of market volatilities on Autosports and EMvision Medical 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 EMvision Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Autosports and EMvision Medical.
Diversification Opportunities for Autosports and EMvision Medical
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Autosports and EMvision is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Autosports Group and EMvision Medical Devices in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EMvision Medical Devices 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 EMvision Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EMvision Medical Devices has no effect on the direction of Autosports i.e., Autosports and EMvision Medical go up and down completely randomly.
Pair Corralation between Autosports and EMvision Medical
Assuming the 90 days trading horizon Autosports Group is expected to under-perform the EMvision Medical. But the stock apears to be less risky and, when comparing its historical volatility, Autosports Group is 1.34 times less risky than EMvision Medical. The stock trades about -0.2 of its potential returns per unit of risk. The EMvision Medical Devices is currently generating about -0.12 of returns per unit of risk over similar time horizon. If you would invest 188.00 in EMvision Medical Devices on November 3, 2024 and sell it today you would lose (7.00) from holding EMvision Medical Devices or give up 3.72% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Autosports Group vs. EMvision Medical Devices
Performance |
| Timeline |
| Autosports Group |
| EMvision Medical Devices |
Autosports and EMvision Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Autosports and EMvision Medical
The main advantage of trading using opposite Autosports and EMvision Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Autosports position performs unexpectedly, EMvision Medical 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 EMvision Medical will offset losses from the drop in EMvision Medical's long position.| Autosports vs. MetalsGrove Mining | Autosports vs. Data3 | Autosports vs. Centaurus Metals | Autosports vs. Computershare |
| EMvision Medical vs. A1 Investments Resources | EMvision Medical vs. Dexus Convenience Retail | EMvision Medical vs. Diversified United Investment | EMvision Medical vs. Tombador Iron |
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 Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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