Correlation Between AutoZone and Dufry AG
Can any of the company-specific risk be diversified away by investing in both AutoZone and Dufry AG 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 AutoZone and Dufry AG into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AutoZone and Dufry AG, you can compare the effects of market volatilities on AutoZone and Dufry AG 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 AutoZone with a short position of Dufry AG. Check out your portfolio center. Please also check ongoing floating volatility patterns of AutoZone and Dufry AG.
Diversification Opportunities for AutoZone and Dufry AG
Average diversification
The 3 months correlation between AutoZone and Dufry is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding AutoZone and Dufry AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dufry AG and AutoZone 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 AutoZone are associated (or correlated) with Dufry AG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dufry AG has no effect on the direction of AutoZone i.e., AutoZone and Dufry AG go up and down completely randomly.
Pair Corralation between AutoZone and Dufry AG
Considering the 90-day investment horizon AutoZone is expected to generate 1.06 times more return on investment than Dufry AG. However, AutoZone is 1.06 times more volatile than Dufry AG. It trades about 0.2 of its potential returns per unit of risk. Dufry AG is currently generating about -0.04 per unit of risk. If you would invest 298,119 in AutoZone on September 2, 2024 and sell it today you would earn a total of 18,835 from holding AutoZone or generate 6.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
AutoZone vs. Dufry AG
Performance |
| Timeline |
| AutoZone |
| Dufry AG |
AutoZone and Dufry AG Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AutoZone and Dufry AG
The main advantage of trading using opposite AutoZone and Dufry AG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AutoZone position performs unexpectedly, Dufry AG 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 Dufry AG will offset losses from the drop in Dufry AG's long position.| AutoZone vs. Advance Auto Parts | AutoZone vs. Tractor Supply | AutoZone vs. Genuine Parts Co | AutoZone vs. Five Below |
| Dufry AG vs. Ulta Beauty | Dufry AG vs. Williams Sonoma | Dufry AG vs. Dicks Sporting Goods | Dufry AG vs. Best Buy Co |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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