Correlation Between Deltex Medical and Auto Trader
Can any of the company-specific risk be diversified away by investing in both Deltex Medical and Auto Trader 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 Deltex Medical and Auto Trader into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Deltex Medical Group and Auto Trader Group, you can compare the effects of market volatilities on Deltex Medical 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 Deltex Medical with a short position of Auto Trader. Check out your portfolio center. Please also check ongoing floating volatility patterns of Deltex Medical and Auto Trader.
Diversification Opportunities for Deltex Medical and Auto Trader
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Deltex and Auto is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Deltex Medical Group 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 Deltex Medical 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 Deltex Medical Group 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 Deltex Medical i.e., Deltex Medical and Auto Trader go up and down completely randomly.
Pair Corralation between Deltex Medical and Auto Trader
Assuming the 90 days trading horizon Deltex Medical Group is expected to generate 2.76 times more return on investment than Auto Trader. However, Deltex Medical is 2.76 times more volatile than Auto Trader Group. It trades about 0.01 of its potential returns per unit of risk. Auto Trader Group is currently generating about -0.43 per unit of risk. If you would invest 8.00 in Deltex Medical Group on September 29, 2024 and sell it today you would earn a total of 0.00 from holding Deltex Medical Group or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Deltex Medical Group vs. Auto Trader Group
Performance |
| Timeline |
| Deltex Medical Group |
| Auto Trader Group |
Deltex Medical and Auto Trader Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Deltex Medical and Auto Trader
The main advantage of trading using opposite Deltex Medical and Auto Trader positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Deltex Medical 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.| Deltex Medical vs. Worldwide Healthcare Trust | Deltex Medical vs. Silver Bullet Data | Deltex Medical vs. Home Depot | Deltex Medical vs. CleanTech Lithium plc |
| Auto Trader vs. Toyota Motor Corp | Auto Trader vs. SoftBank Group Corp | Auto Trader vs. Halyk Bank of | Auto Trader vs. Samsung Electronics Co |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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