Correlation Between Autosports and Enegex NL
Can any of the company-specific risk be diversified away by investing in both Autosports and Enegex NL 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 Enegex NL into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Autosports Group and Enegex NL, you can compare the effects of market volatilities on Autosports and Enegex NL 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 Enegex NL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Autosports and Enegex NL.
Diversification Opportunities for Autosports and Enegex NL
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Autosports and Enegex is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Autosports Group and Enegex NL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Enegex NL 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 Enegex NL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Enegex NL has no effect on the direction of Autosports i.e., Autosports and Enegex NL go up and down completely randomly.
Pair Corralation between Autosports and Enegex NL
Assuming the 90 days trading horizon Autosports Group is expected to under-perform the Enegex NL. But the stock apears to be less risky and, when comparing its historical volatility, Autosports Group is 1.52 times less risky than Enegex NL. The stock trades about -0.5 of its potential returns per unit of risk. The Enegex NL is currently generating about -0.32 of returns per unit of risk over similar time horizon. If you would invest 1.60 in Enegex NL on September 4, 2024 and sell it today you would lose (0.20) from holding Enegex NL or give up 12.5% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Autosports Group vs. Enegex NL
Performance |
| Timeline |
| Autosports Group |
| Enegex NL |
Autosports and Enegex NL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Autosports and Enegex NL
The main advantage of trading using opposite Autosports and Enegex NL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Autosports position performs unexpectedly, Enegex NL 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 Enegex NL will offset losses from the drop in Enegex NL's long position.| Autosports vs. Aneka Tambang Tbk | Autosports vs. BHP Group Limited | Autosports vs. Commonwealth Bank | Autosports vs. Commonwealth Bank of |
| Enegex NL vs. Homeco Daily Needs | Enegex NL vs. BKI Investment | Enegex NL vs. Epsilon Healthcare | Enegex NL vs. Navigator Global Investments |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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