Correlation Between Boss Energy and Autosports
Can any of the company-specific risk be diversified away by investing in both Boss Energy and Autosports 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 Boss Energy and Autosports into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Boss Energy Limited and Autosports Group, you can compare the effects of market volatilities on Boss Energy and Autosports 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 Boss Energy with a short position of Autosports. Check out your portfolio center. Please also check ongoing floating volatility patterns of Boss Energy and Autosports.
Diversification Opportunities for Boss Energy and Autosports
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Boss and Autosports is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Boss Energy Limited and Autosports Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Autosports Group and Boss Energy 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 Boss Energy Limited are associated (or correlated) with Autosports. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Autosports Group has no effect on the direction of Boss Energy i.e., Boss Energy and Autosports go up and down completely randomly.
Pair Corralation between Boss Energy and Autosports
Assuming the 90 days trading horizon Boss Energy Limited is expected to under-perform the Autosports. In addition to that, Boss Energy is 1.75 times more volatile than Autosports Group. It trades about -0.21 of its total potential returns per unit of risk. Autosports Group is currently generating about -0.32 per unit of volatility. If you would invest 210.00 in Autosports Group on September 15, 2024 and sell it today you would lose (22.00) from holding Autosports Group or give up 10.48% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Boss Energy Limited vs. Autosports Group
Performance |
| Timeline |
| Boss Energy Limited |
| Autosports Group |
Boss Energy and Autosports Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Boss Energy and Autosports
The main advantage of trading using opposite Boss Energy and Autosports positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Boss Energy position performs unexpectedly, Autosports 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 Autosports will offset losses from the drop in Autosports' long position.| Boss Energy vs. Autosports Group | Boss Energy vs. REGAL ASIAN INVESTMENTS | Boss Energy vs. Mirrabooka Investments | Boss Energy vs. Sandon Capital Investments |
| Autosports vs. Westpac Banking | Autosports vs. National Australia Bank | Autosports vs. National Australia Bank | Autosports vs. National Australia Bank |
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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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