Correlation Between Auction Technology and Young Cos
Can any of the company-specific risk be diversified away by investing in both Auction Technology and Young Cos 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 Young Cos 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 Young Cos Brewery, you can compare the effects of market volatilities on Auction Technology and Young Cos 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 Young Cos. Check out your portfolio center. Please also check ongoing floating volatility patterns of Auction Technology and Young Cos.
Diversification Opportunities for Auction Technology and Young Cos
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Auction and Young is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Auction Technology Group and Young Cos Brewery in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Young Cos Brewery 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 Young Cos. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Young Cos Brewery has no effect on the direction of Auction Technology i.e., Auction Technology and Young Cos go up and down completely randomly.
Pair Corralation between Auction Technology and Young Cos
Assuming the 90 days trading horizon Auction Technology Group is expected to generate 3.59 times more return on investment than Young Cos. However, Auction Technology is 3.59 times more volatile than Young Cos Brewery. It trades about 0.24 of its potential returns per unit of risk. Young Cos Brewery is currently generating about 0.12 per unit of risk. If you would invest 46,300 in Auction Technology Group on September 12, 2024 and sell it today you would earn a total of 10,200 from holding Auction Technology Group or generate 22.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Auction Technology Group vs. Young Cos Brewery
Performance |
| Timeline |
| Auction Technology |
| Young Cos Brewery |
Auction Technology and Young Cos Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Auction Technology and Young Cos
The main advantage of trading using opposite Auction Technology and Young Cos positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Auction Technology position performs unexpectedly, Young Cos 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 Young Cos will offset losses from the drop in Young Cos' long position.| Auction Technology vs. Home Depot | Auction Technology vs. Chrysalis Investments | Auction Technology vs. Neometals | Auction Technology vs. Coor Service Management |
| Young Cos vs. National Atomic Co | Young Cos vs. OTP Bank Nyrt | Young Cos vs. Samsung Electronics Co | Young Cos vs. Samsung Electronics Co |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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