Correlation Between 1StdibsCom and AutoNation
Can any of the company-specific risk be diversified away by investing in both 1StdibsCom and AutoNation 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 1StdibsCom and AutoNation into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between 1StdibsCom and AutoNation, you can compare the effects of market volatilities on 1StdibsCom and AutoNation 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 1StdibsCom with a short position of AutoNation. Check out your portfolio center. Please also check ongoing floating volatility patterns of 1StdibsCom and AutoNation.
Diversification Opportunities for 1StdibsCom and AutoNation
-0.59 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between 1StdibsCom and AutoNation is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding 1StdibsCom and AutoNation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AutoNation and 1StdibsCom 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 1StdibsCom are associated (or correlated) with AutoNation. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AutoNation has no effect on the direction of 1StdibsCom i.e., 1StdibsCom and AutoNation go up and down completely randomly.
Pair Corralation between 1StdibsCom and AutoNation
Given the investment horizon of 90 days 1StdibsCom is expected to under-perform the AutoNation. In addition to that, 1StdibsCom is 1.46 times more volatile than AutoNation. It trades about -0.1 of its total potential returns per unit of risk. AutoNation is currently generating about 0.07 per unit of volatility. If you would invest 17,356 in AutoNation on November 1, 2024 and sell it today you would earn a total of 1,423 from holding AutoNation or generate 8.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
1StdibsCom vs. AutoNation
Performance |
| Timeline |
| 1StdibsCom |
| AutoNation |
1StdibsCom and AutoNation Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with 1StdibsCom and AutoNation
The main advantage of trading using opposite 1StdibsCom and AutoNation positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 1StdibsCom position performs unexpectedly, AutoNation 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 AutoNation will offset losses from the drop in AutoNation's long position.| 1StdibsCom vs. Hour Loop | 1StdibsCom vs. Liquidity Services | 1StdibsCom vs. Qurate Retail Series | 1StdibsCom vs. Emerge Commerce |
| AutoNation vs. Sonic Automotive | AutoNation vs. Lithia Motors | AutoNation vs. Asbury Automotive Group | AutoNation vs. Penske Automotive Group |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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