Correlation Between Cboe UK and Auto Trader
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By analyzing existing cross correlation between Cboe UK Consumer and Auto Trader Group, you can compare the effects of market volatilities on Cboe UK 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 Cboe UK with a short position of Auto Trader. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cboe UK and Auto Trader.
Diversification Opportunities for Cboe UK and Auto Trader
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Cboe and Auto is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Cboe UK Consumer 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 Cboe UK 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 Cboe UK Consumer 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 Cboe UK i.e., Cboe UK and Auto Trader go up and down completely randomly.
Pair Corralation between Cboe UK and Auto Trader
Assuming the 90 days trading horizon Cboe UK Consumer is expected to generate 0.57 times more return on investment than Auto Trader. However, Cboe UK Consumer is 1.77 times less risky than Auto Trader. It trades about 0.33 of its potential returns per unit of risk. Auto Trader Group is currently generating about -0.17 per unit of risk. If you would invest 2,948,589 in Cboe UK Consumer on August 24, 2024 and sell it today you would earn a total of 236,723 from holding Cboe UK Consumer or generate 8.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cboe UK Consumer vs. Auto Trader Group
Performance |
| Timeline |
Cboe UK and Auto Trader Volatility Contrast
Predicted Return Density |
| Returns |
Cboe UK Consumer
Pair trading matchups for Cboe UK
Auto Trader Group
Pair trading matchups for Auto Trader
Pair Trading with Cboe UK and Auto Trader
The main advantage of trading using opposite Cboe UK and Auto Trader positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cboe UK 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.| Cboe UK vs. JLEN Environmental Assets | Cboe UK vs. Silvercorp Metals | Cboe UK vs. Eastinco Mining Exploration | Cboe UK vs. Dentsply Sirona |
| Auto Trader vs. Samsung Electronics Co | Auto Trader vs. Samsung Electronics Co | Auto Trader vs. Hyundai Motor | Auto Trader vs. Toyota Motor Corp |
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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