Correlation Between Auto Trader and 70GD
Can any of the company-specific risk be diversified away by investing in both Auto Trader and 70GD 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 70GD 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 70GD, you can compare the effects of market volatilities on Auto Trader and 70GD 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 70GD. Check out your portfolio center. Please also check ongoing floating volatility patterns of Auto Trader and 70GD.
Diversification Opportunities for Auto Trader and 70GD
-0.51 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Auto and 70GD is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Auto Trader Group and 70GD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on 70GD 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 70GD. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of 70GD has no effect on the direction of Auto Trader i.e., Auto Trader and 70GD go up and down completely randomly.
Pair Corralation between Auto Trader and 70GD
If you would invest 78,740 in Auto Trader Group on November 7, 2024 and sell it today you would earn a total of 300.00 from holding Auto Trader Group or generate 0.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 91.3% |
| Values | Daily Returns |
Auto Trader Group vs. 70GD
Performance |
| Timeline |
| Auto Trader Group |
| 70GD |
Auto Trader and 70GD Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Auto Trader and 70GD
The main advantage of trading using opposite Auto Trader and 70GD positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Auto Trader position performs unexpectedly, 70GD 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 70GD will offset losses from the drop in 70GD's long position.| Auto Trader vs. Fulcrum Metals PLC | Auto Trader vs. Taiwan Semiconductor Manufacturing | Auto Trader vs. Public Storage | Auto Trader vs. URU Metals |
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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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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