Correlation Between Auto Trader and Thor Mining
Can any of the company-specific risk be diversified away by investing in both Auto Trader and Thor Mining 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 Thor Mining 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 Thor Mining PLC, you can compare the effects of market volatilities on Auto Trader and Thor Mining 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 Thor Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Auto Trader and Thor Mining.
Diversification Opportunities for Auto Trader and Thor Mining
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Auto and Thor is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Auto Trader Group and Thor Mining PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thor Mining PLC 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 Thor Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thor Mining PLC has no effect on the direction of Auto Trader i.e., Auto Trader and Thor Mining go up and down completely randomly.
Pair Corralation between Auto Trader and Thor Mining
Assuming the 90 days trading horizon Auto Trader Group is expected to generate 0.37 times more return on investment than Thor Mining. However, Auto Trader Group is 2.72 times less risky than Thor Mining. It trades about -0.05 of its potential returns per unit of risk. Thor Mining PLC is currently generating about -0.04 per unit of risk. If you would invest 78,791 in Auto Trader Group on October 26, 2024 and sell it today you would lose (891.00) from holding Auto Trader Group or give up 1.13% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Auto Trader Group vs. Thor Mining PLC
Performance |
| Timeline |
| Auto Trader Group |
| Thor Mining PLC |
Auto Trader and Thor Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Auto Trader and Thor Mining
The main advantage of trading using opposite Auto Trader and Thor Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Auto Trader position performs unexpectedly, Thor Mining 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 Thor Mining will offset losses from the drop in Thor Mining's long position.| Auto Trader vs. Samsung Electronics Co | Auto Trader vs. Samsung Electronics Co | Auto Trader vs. Toyota Motor Corp | Auto Trader vs. SoftBank Group Corp |
| Thor Mining vs. Givaudan SA | Thor Mining vs. Antofagasta PLC | Thor Mining vs. Ferrexpo PLC | Thor Mining vs. Atalaya 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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