Correlation Between EAST SIDE and AUTO TRADER
Can any of the company-specific risk be diversified away by investing in both EAST SIDE 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 EAST SIDE and AUTO TRADER into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between EAST SIDE GAMES and AUTO TRADER ADR, you can compare the effects of market volatilities on EAST SIDE 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 EAST SIDE with a short position of AUTO TRADER. Check out your portfolio center. Please also check ongoing floating volatility patterns of EAST SIDE and AUTO TRADER.
Diversification Opportunities for EAST SIDE and AUTO TRADER
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between EAST and AUTO is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding EAST SIDE GAMES and AUTO TRADER ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AUTO TRADER ADR and EAST SIDE 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 EAST SIDE GAMES 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 ADR has no effect on the direction of EAST SIDE i.e., EAST SIDE and AUTO TRADER go up and down completely randomly.
Pair Corralation between EAST SIDE and AUTO TRADER
Assuming the 90 days horizon EAST SIDE GAMES is expected to generate 3.78 times more return on investment than AUTO TRADER. However, EAST SIDE is 3.78 times more volatile than AUTO TRADER ADR. It trades about 0.02 of its potential returns per unit of risk. AUTO TRADER ADR is currently generating about 0.07 per unit of risk. If you would invest 44.00 in EAST SIDE GAMES on September 1, 2024 and sell it today you would lose (8.00) from holding EAST SIDE GAMES or give up 18.18% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
EAST SIDE GAMES vs. AUTO TRADER ADR
Performance |
| Timeline |
| EAST SIDE GAMES |
| AUTO TRADER ADR |
EAST SIDE and AUTO TRADER Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with EAST SIDE and AUTO TRADER
The main advantage of trading using opposite EAST SIDE and AUTO TRADER positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EAST SIDE 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.| EAST SIDE vs. WILLIS LEASE FIN | EAST SIDE vs. ARDAGH METAL PACDL 0001 | EAST SIDE vs. SHIP HEALTHCARE HLDGINC | EAST SIDE vs. Lendlease Group |
| AUTO TRADER vs. Alphabet Class A | AUTO TRADER vs. Alphabet Class A | AUTO TRADER vs. Meta Platforms | AUTO TRADER vs. Tencent Holdings |
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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