Correlation Between Auto Trader and MOL Hungarian
Can any of the company-specific risk be diversified away by investing in both Auto Trader and MOL Hungarian 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 Auto Trader and MOL Hungarian into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Auto Trader Group and MOL Hungarian Oil, you can compare the effects of market volatilities on Auto Trader and MOL Hungarian 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 Auto Trader with a short position of MOL Hungarian. Check out your portfolio center. Please also check ongoing floating volatility patterns of Auto Trader and MOL Hungarian.
Diversification Opportunities for Auto Trader and MOL Hungarian
0.01 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Auto and MOL is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Auto Trader Group and MOL Hungarian Oil in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MOL Hungarian Oil and Auto Trader 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 Auto Trader Group are associated (or correlated) with MOL Hungarian. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MOL Hungarian Oil has no effect on the direction of Auto Trader i.e., Auto Trader and MOL Hungarian go up and down completely randomly.
Pair Corralation between Auto Trader and MOL Hungarian
Assuming the 90 days trading horizon Auto Trader Group is expected to generate 0.97 times more return on investment than MOL Hungarian. However, Auto Trader Group is 1.03 times less risky than MOL Hungarian. It trades about 0.06 of its potential returns per unit of risk. MOL Hungarian Oil is currently generating about 0.0 per unit of risk. If you would invest 62,339 in Auto Trader Group on September 2, 2024 and sell it today you would earn a total of 21,561 from holding Auto Trader Group or generate 34.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 92.31% |
| Values | Daily Returns |
Auto Trader Group vs. MOL Hungarian Oil
Performance |
| Timeline |
| Auto Trader Group |
| MOL Hungarian Oil |
Auto Trader and MOL Hungarian Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Auto Trader and MOL Hungarian
The main advantage of trading using opposite Auto Trader and MOL Hungarian positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Auto Trader position performs unexpectedly, MOL Hungarian 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 MOL Hungarian will offset losses from the drop in MOL Hungarian's long position.| Auto Trader vs. Catalyst Media Group | Auto Trader vs. Tamburi Investment Partners | Auto Trader vs. Magnora ASA | Auto Trader vs. RTW Venture Fund |
| MOL Hungarian vs. Edita Food Industries | MOL Hungarian vs. New Residential Investment | MOL Hungarian vs. Roebuck Food Group | MOL Hungarian vs. Beeks Trading |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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