Correlation Between CAP LEASE and Auction Technology
Can any of the company-specific risk be diversified away by investing in both CAP LEASE and Auction Technology 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 CAP LEASE and Auction Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CAP LEASE AVIATION and Auction Technology Group, you can compare the effects of market volatilities on CAP LEASE and Auction Technology 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 CAP LEASE with a short position of Auction Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of CAP LEASE and Auction Technology.
Diversification Opportunities for CAP LEASE and Auction Technology
-0.78 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between CAP and Auction is -0.78. Overlapping area represents the amount of risk that can be diversified away by holding CAP LEASE AVIATION and Auction Technology Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Auction Technology and CAP LEASE 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 CAP LEASE AVIATION are associated (or correlated) with Auction Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Auction Technology has no effect on the direction of CAP LEASE i.e., CAP LEASE and Auction Technology go up and down completely randomly.
Pair Corralation between CAP LEASE and Auction Technology
Assuming the 90 days trading horizon CAP LEASE AVIATION is expected to under-perform the Auction Technology. But the stock apears to be less risky and, when comparing its historical volatility, CAP LEASE AVIATION is 2.28 times less risky than Auction Technology. The stock trades about -0.14 of its potential returns per unit of risk. The Auction Technology Group is currently generating about 0.28 of returns per unit of risk over similar time horizon. If you would invest 45,600 in Auction Technology Group on September 15, 2024 and sell it today you would earn a total of 11,900 from holding Auction Technology Group or generate 26.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
CAP LEASE AVIATION vs. Auction Technology Group
Performance |
| Timeline |
| CAP LEASE AVIATION |
| Auction Technology |
CAP LEASE and Auction Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CAP LEASE and Auction Technology
The main advantage of trading using opposite CAP LEASE and Auction Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CAP LEASE position performs unexpectedly, Auction Technology 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 Auction Technology will offset losses from the drop in Auction Technology's long position.| CAP LEASE vs. Givaudan SA | CAP LEASE vs. Antofagasta PLC | CAP LEASE vs. Ferrexpo PLC | CAP LEASE vs. Atalaya Mining |
| Auction Technology vs. Datagroup SE | Auction Technology vs. United Internet AG | Auction Technology vs. CAP LEASE AVIATION | Auction Technology vs. Universal Display 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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