Correlation Between Diversified Energy and Autins Group
Can any of the company-specific risk be diversified away by investing in both Diversified Energy and Autins Group 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 Diversified Energy and Autins Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Diversified Energy and Autins Group plc, you can compare the effects of market volatilities on Diversified Energy and Autins Group 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 Diversified Energy with a short position of Autins Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Diversified Energy and Autins Group.
Diversification Opportunities for Diversified Energy and Autins Group
-0.96 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Diversified and Autins is -0.96. Overlapping area represents the amount of risk that can be diversified away by holding Diversified Energy and Autins Group plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Autins Group plc and Diversified 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 Diversified Energy are associated (or correlated) with Autins Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Autins Group plc has no effect on the direction of Diversified Energy i.e., Diversified Energy and Autins Group go up and down completely randomly.
Pair Corralation between Diversified Energy and Autins Group
Assuming the 90 days trading horizon Diversified Energy is expected to generate 0.66 times more return on investment than Autins Group. However, Diversified Energy is 1.51 times less risky than Autins Group. It trades about 0.49 of its potential returns per unit of risk. Autins Group plc is currently generating about -0.28 per unit of risk. If you would invest 92,979 in Diversified Energy on September 2, 2024 and sell it today you would earn a total of 34,821 from holding Diversified Energy or generate 37.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Diversified Energy vs. Autins Group plc
Performance |
| Timeline |
| Diversified Energy |
| Autins Group plc |
Diversified Energy and Autins Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Diversified Energy and Autins Group
The main advantage of trading using opposite Diversified Energy and Autins Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Diversified Energy position performs unexpectedly, Autins Group 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 Autins Group will offset losses from the drop in Autins Group's long position.| Diversified Energy vs. Target Healthcare REIT | Diversified Energy vs. Universal Health Services | Diversified Energy vs. HCA Healthcare | Diversified Energy vs. National Beverage Corp |
| Autins Group vs. Auction Technology Group | Autins Group vs. Centaur Media | Autins Group vs. XLMedia PLC | Autins Group vs. Sunny Optical Technology |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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