Correlation Between Cornish Metals and Automatic Data
Can any of the company-specific risk be diversified away by investing in both Cornish Metals and Automatic Data 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 Cornish Metals and Automatic Data into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cornish Metals and Automatic Data Processing, you can compare the effects of market volatilities on Cornish Metals and Automatic Data 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 Cornish Metals with a short position of Automatic Data. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cornish Metals and Automatic Data.
Diversification Opportunities for Cornish Metals and Automatic Data
-0.56 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Cornish and Automatic is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding Cornish Metals and Automatic Data Processing in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Automatic Data Processing and Cornish Metals 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 Cornish Metals are associated (or correlated) with Automatic Data. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Automatic Data Processing has no effect on the direction of Cornish Metals i.e., Cornish Metals and Automatic Data go up and down completely randomly.
Pair Corralation between Cornish Metals and Automatic Data
Assuming the 90 days trading horizon Cornish Metals is expected to generate 2.85 times more return on investment than Automatic Data. However, Cornish Metals is 2.85 times more volatile than Automatic Data Processing. It trades about -0.01 of its potential returns per unit of risk. Automatic Data Processing is currently generating about -0.05 per unit of risk. If you would invest 850.00 in Cornish Metals on October 30, 2024 and sell it today you would lose (20.00) from holding Cornish Metals or give up 2.35% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 97.5% |
| Values | Daily Returns |
Cornish Metals vs. Automatic Data Processing
Performance |
| Timeline |
| Cornish Metals |
| Automatic Data Processing |
Cornish Metals and Automatic Data Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cornish Metals and Automatic Data
The main advantage of trading using opposite Cornish Metals and Automatic Data positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cornish Metals position performs unexpectedly, Automatic Data 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 Automatic Data will offset losses from the drop in Automatic Data's long position.| Cornish Metals vs. Manulife Financial Corp | Cornish Metals vs. Charter Communications Cl | Cornish Metals vs. Sparebank 1 SR | Cornish Metals vs. Mobile Tornado Group |
| Automatic Data vs. Adriatic Metals | Automatic Data vs. Atalaya Mining | Automatic Data vs. Dairy Farm International | Automatic Data vs. Tyson Foods Cl |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
Other Complementary Tools
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals |