Correlation Between SPASX 20 and Autosports
Can any of the company-specific risk be diversified away by investing in both SPASX 20 and Autosports 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 SPASX 20 and Autosports into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SPASX 20 and Autosports Group, you can compare the effects of market volatilities on SPASX 20 and Autosports 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 SPASX 20 with a short position of Autosports. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPASX 20 and Autosports.
Diversification Opportunities for SPASX 20 and Autosports
-0.01 | Correlation Coefficient |
Good diversification
The 3 months correlation between SPASX and Autosports is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding SPASX 20 and Autosports Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Autosports Group and SPASX 20 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 SPASX 20 are associated (or correlated) with Autosports. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Autosports Group has no effect on the direction of SPASX 20 i.e., SPASX 20 and Autosports go up and down completely randomly.
Pair Corralation between SPASX 20 and Autosports
Assuming the 90 days trading horizon SPASX 20 is expected to generate 0.4 times more return on investment than Autosports. However, SPASX 20 is 2.48 times less risky than Autosports. It trades about 0.08 of its potential returns per unit of risk. Autosports Group is currently generating about -0.02 per unit of risk. If you would invest 408,350 in SPASX 20 on September 3, 2024 and sell it today you would earn a total of 64,860 from holding SPASX 20 or generate 15.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SPASX 20 vs. Autosports Group
Performance |
| Timeline |
SPASX 20 and Autosports Volatility Contrast
Predicted Return Density |
| Returns |
SPASX 20
Pair trading matchups for SPASX 20
Autosports Group
Pair trading matchups for Autosports
Pair Trading with SPASX 20 and Autosports
The main advantage of trading using opposite SPASX 20 and Autosports positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SPASX 20 position performs unexpectedly, Autosports 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 Autosports will offset losses from the drop in Autosports' long position.| SPASX 20 vs. Computershare | SPASX 20 vs. TTG Fintech | SPASX 20 vs. Dexus Convenience Retail | SPASX 20 vs. Retail Food Group |
| Autosports vs. Westpac Banking | Autosports vs. Champion Iron | Autosports vs. iShares Global Healthcare | Autosports vs. Peel Mining |
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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