Correlation Between Anglesey Mining and Auto Trader
Can any of the company-specific risk be diversified away by investing in both Anglesey Mining and Auto Trader 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 Anglesey Mining and Auto Trader into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Anglesey Mining and Auto Trader Group, you can compare the effects of market volatilities on Anglesey Mining and Auto Trader 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 Anglesey Mining with a short position of Auto Trader. Check out your portfolio center. Please also check ongoing floating volatility patterns of Anglesey Mining and Auto Trader.
Diversification Opportunities for Anglesey Mining and Auto Trader
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Anglesey and Auto is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Anglesey Mining and Auto Trader Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Auto Trader Group and Anglesey Mining 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 Anglesey Mining are associated (or correlated) with Auto Trader. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Auto Trader Group has no effect on the direction of Anglesey Mining i.e., Anglesey Mining and Auto Trader go up and down completely randomly.
Pair Corralation between Anglesey Mining and Auto Trader
Assuming the 90 days trading horizon Anglesey Mining is expected to under-perform the Auto Trader. In addition to that, Anglesey Mining is 3.73 times more volatile than Auto Trader Group. It trades about -0.06 of its total potential returns per unit of risk. Auto Trader Group is currently generating about 0.02 per unit of volatility. If you would invest 81,598 in Auto Trader Group on September 3, 2024 and sell it today you would earn a total of 1,742 from holding Auto Trader Group or generate 2.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Anglesey Mining vs. Auto Trader Group
Performance |
| Timeline |
| Anglesey Mining |
| Auto Trader Group |
Anglesey Mining and Auto Trader Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Anglesey Mining and Auto Trader
The main advantage of trading using opposite Anglesey Mining and Auto Trader positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Anglesey Mining position performs unexpectedly, Auto Trader 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 Auto Trader will offset losses from the drop in Auto Trader's long position.| Anglesey Mining vs. Cincinnati Financial Corp | Anglesey Mining vs. Extra Space Storage | Anglesey Mining vs. Alliance Data Systems | Anglesey Mining vs. Fidelity National Information |
| Auto Trader vs. Applied Materials | Auto Trader vs. Evolution Gaming Group | Auto Trader vs. Air Products Chemicals | Auto Trader vs. Omega Healthcare Investors |
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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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