Correlation Between Auction Technology and Team Internet
Can any of the company-specific risk be diversified away by investing in both Auction Technology and Team Internet 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 Auction Technology and Team Internet into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Auction Technology Group and Team Internet Group, you can compare the effects of market volatilities on Auction Technology and Team Internet 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 Auction Technology with a short position of Team Internet. Check out your portfolio center. Please also check ongoing floating volatility patterns of Auction Technology and Team Internet.
Diversification Opportunities for Auction Technology and Team Internet
0.26 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Auction and Team is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Auction Technology Group and Team Internet Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Team Internet Group and Auction Technology 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 Auction Technology Group are associated (or correlated) with Team Internet. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Team Internet Group has no effect on the direction of Auction Technology i.e., Auction Technology and Team Internet go up and down completely randomly.
Pair Corralation between Auction Technology and Team Internet
Assuming the 90 days trading horizon Auction Technology Group is expected to generate 0.79 times more return on investment than Team Internet. However, Auction Technology Group is 1.26 times less risky than Team Internet. It trades about 0.01 of its potential returns per unit of risk. Team Internet Group is currently generating about -0.02 per unit of risk. If you would invest 63,300 in Auction Technology Group on December 8, 2024 and sell it today you would lose (6,400) from holding Auction Technology Group or give up 10.11% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.6% |
| Values | Daily Returns |
Auction Technology Group vs. Team Internet Group
Performance |
| Timeline |
| Auction Technology |
| Team Internet Group |
Auction Technology and Team Internet Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Auction Technology and Team Internet
The main advantage of trading using opposite Auction Technology and Team Internet positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Auction Technology position performs unexpectedly, Team Internet 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 Team Internet will offset losses from the drop in Team Internet's long position.| Auction Technology vs. Caledonia Mining | ||
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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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