Correlation Between Autosports and Seven West
Can any of the company-specific risk be diversified away by investing in both Autosports and Seven West 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 Seven West into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Autosports Group and Seven West Media, you can compare the effects of market volatilities on Autosports and Seven West 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 Seven West. Check out your portfolio center. Please also check ongoing floating volatility patterns of Autosports and Seven West.
Diversification Opportunities for Autosports and Seven West
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Autosports and Seven is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Autosports Group and Seven West Media in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Seven West Media 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 Seven West. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Seven West Media has no effect on the direction of Autosports i.e., Autosports and Seven West go up and down completely randomly.
Pair Corralation between Autosports and Seven West
Assuming the 90 days trading horizon Autosports Group is expected to generate 0.58 times more return on investment than Seven West. However, Autosports Group is 1.74 times less risky than Seven West. It trades about -0.01 of its potential returns per unit of risk. Seven West Media is currently generating about -0.03 per unit of risk. If you would invest 216.00 in Autosports Group on August 27, 2024 and sell it today you would lose (16.00) from holding Autosports Group or give up 7.41% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Autosports Group vs. Seven West Media
Performance |
Timeline |
Autosports Group |
Seven West Media |
Autosports and Seven West Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Autosports and Seven West
The main advantage of trading using opposite Autosports and Seven West positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Autosports position performs unexpectedly, Seven West 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 Seven West will offset losses from the drop in Seven West's long position.Autosports vs. Aneka Tambang Tbk | Autosports vs. Macquarie Group | Autosports vs. Macquarie Group Ltd | Autosports vs. Challenger |
Seven West vs. Gtn | Seven West vs. Dynamic Drill And | Seven West vs. Insignia Financial | Seven West vs. G8 Education |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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