Correlation Between Autosports and Southern Cross
Can any of the company-specific risk be diversified away by investing in both Autosports and Southern Cross 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 Southern Cross into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Autosports Group and Southern Cross Media, you can compare the effects of market volatilities on Autosports and Southern Cross 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 Southern Cross. Check out your portfolio center. Please also check ongoing floating volatility patterns of Autosports and Southern Cross.
Diversification Opportunities for Autosports and Southern Cross
-0.87 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Autosports and Southern is -0.87. Overlapping area represents the amount of risk that can be diversified away by holding Autosports Group and Southern Cross Media in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Southern Cross 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 Southern Cross. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Southern Cross Media has no effect on the direction of Autosports i.e., Autosports and Southern Cross go up and down completely randomly.
Pair Corralation between Autosports and Southern Cross
Assuming the 90 days trading horizon Autosports Group is expected to under-perform the Southern Cross. But the stock apears to be less risky and, when comparing its historical volatility, Autosports Group is 1.97 times less risky than Southern Cross. The stock trades about -0.17 of its potential returns per unit of risk. The Southern Cross Media is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 57.00 in Southern Cross Media on October 14, 2024 and sell it today you would earn a total of 5.00 from holding Southern Cross Media or generate 8.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Autosports Group vs. Southern Cross Media
Performance |
| Timeline |
| Autosports Group |
| Southern Cross Media |
Autosports and Southern Cross Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Autosports and Southern Cross
The main advantage of trading using opposite Autosports and Southern Cross positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Autosports position performs unexpectedly, Southern Cross 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 Southern Cross will offset losses from the drop in Southern Cross' long position.| Autosports vs. Chalice Mining Limited | Autosports vs. Hutchison Telecommunications | Autosports vs. Truscott Mining Corp | Autosports vs. ABACUS STORAGE KING |
| Southern Cross vs. National Storage REIT | Southern Cross vs. BKI Investment | Southern Cross vs. Aristocrat Leisure | Southern Cross vs. Autosports Group |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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