Correlation Between Autosports and Viva Leisure
Can any of the company-specific risk be diversified away by investing in both Autosports and Viva Leisure 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 Viva Leisure into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Autosports Group and Viva Leisure, you can compare the effects of market volatilities on Autosports and Viva Leisure 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 Viva Leisure. Check out your portfolio center. Please also check ongoing floating volatility patterns of Autosports and Viva Leisure.
Diversification Opportunities for Autosports and Viva Leisure
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Autosports and Viva is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Autosports Group and Viva Leisure in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Viva Leisure 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 Viva Leisure. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Viva Leisure has no effect on the direction of Autosports i.e., Autosports and Viva Leisure go up and down completely randomly.
Pair Corralation between Autosports and Viva Leisure
Assuming the 90 days trading horizon Autosports Group is expected to under-perform the Viva Leisure. But the stock apears to be less risky and, when comparing its historical volatility, Autosports Group is 1.13 times less risky than Viva Leisure. The stock trades about 0.0 of its potential returns per unit of risk. The Viva Leisure is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 125.00 in Viva Leisure on August 26, 2024 and sell it today you would earn a total of 14.00 from holding Viva Leisure or generate 11.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Autosports Group vs. Viva Leisure
Performance |
| Timeline |
| Autosports Group |
| Viva Leisure |
Autosports and Viva Leisure Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Autosports and Viva Leisure
The main advantage of trading using opposite Autosports and Viva Leisure positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Autosports position performs unexpectedly, Viva Leisure 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 Viva Leisure will offset losses from the drop in Viva Leisure's long position.| Autosports vs. Aneka Tambang Tbk | Autosports vs. Macquarie Group | Autosports vs. Macquarie Group Ltd | Autosports vs. Challenger |
| Viva Leisure vs. Richmond Vanadium Technology | Viva Leisure vs. Dexus Convenience Retail | Viva Leisure vs. Retail Food Group | Viva Leisure vs. Janison Education 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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