Correlation Between Autosports and OOhMedia
Can any of the company-specific risk be diversified away by investing in both Autosports and OOhMedia 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 OOhMedia into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Autosports Group and oOhMedia, you can compare the effects of market volatilities on Autosports and OOhMedia 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 OOhMedia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Autosports and OOhMedia.
Diversification Opportunities for Autosports and OOhMedia
0.23 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Autosports and OOhMedia is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Autosports Group and oOhMedia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on oOhMedia 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 OOhMedia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of oOhMedia has no effect on the direction of Autosports i.e., Autosports and OOhMedia go up and down completely randomly.
Pair Corralation between Autosports and OOhMedia
Assuming the 90 days trading horizon Autosports Group is expected to under-perform the OOhMedia. But the stock apears to be less risky and, when comparing its historical volatility, Autosports Group is 2.08 times less risky than OOhMedia. The stock trades about -0.21 of its potential returns per unit of risk. The oOhMedia is currently generating about -0.07 of returns per unit of risk over similar time horizon. If you would invest 119.00 in oOhMedia on November 5, 2024 and sell it today you would lose (4.00) from holding oOhMedia or give up 3.36% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Autosports Group vs. oOhMedia
Performance |
| Timeline |
| Autosports Group |
| oOhMedia |
Autosports and OOhMedia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Autosports and OOhMedia
The main advantage of trading using opposite Autosports and OOhMedia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Autosports position performs unexpectedly, OOhMedia 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 OOhMedia will offset losses from the drop in OOhMedia's long position.| Autosports vs. Treasury Wine Estates | Autosports vs. Dalaroo Metals | Autosports vs. Hutchison Telecommunications | Autosports vs. Cosmo Metals |
| OOhMedia vs. Torque Metals | OOhMedia vs. FireFly Metals | OOhMedia vs. Treasury Wine Estates | OOhMedia vs. Mayfield Childcare |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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