Correlation Between Etsy and Automatic Data
Can any of the company-specific risk be diversified away by investing in both Etsy 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 Etsy and Automatic Data into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Etsy Inc and Automatic Data Processing, you can compare the effects of market volatilities on Etsy 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 Etsy with a short position of Automatic Data. Check out your portfolio center. Please also check ongoing floating volatility patterns of Etsy and Automatic Data.
Diversification Opportunities for Etsy and Automatic Data
-0.2 | Correlation Coefficient |
Good diversification
The 3 months correlation between Etsy and Automatic is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding Etsy Inc 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 Etsy 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 Etsy Inc 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 Etsy i.e., Etsy and Automatic Data go up and down completely randomly.
Pair Corralation between Etsy and Automatic Data
Assuming the 90 days trading horizon Etsy Inc is expected to under-perform the Automatic Data. In addition to that, Etsy is 1.19 times more volatile than Automatic Data Processing. It trades about -0.06 of its total potential returns per unit of risk. Automatic Data Processing is currently generating about 0.05 per unit of volatility. If you would invest 5,486 in Automatic Data Processing on August 27, 2024 and sell it today you would earn a total of 1,914 from holding Automatic Data Processing or generate 34.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 77.51% |
| Values | Daily Returns |
Etsy Inc vs. Automatic Data Processing
Performance |
| Timeline |
| Etsy Inc |
| Automatic Data Processing |
Etsy and Automatic Data Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Etsy and Automatic Data
The main advantage of trading using opposite Etsy and Automatic Data positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Etsy 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.| Etsy vs. Fidelity National Information | Etsy vs. Automatic Data Processing | Etsy vs. Bio Techne | Etsy vs. Dell Technologies |
| Automatic Data vs. Fras le SA | Automatic Data vs. Clave Indices De | Automatic Data vs. BTG Pactual Logstica | Automatic Data vs. Telefonaktiebolaget LM Ericsson |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
Other Complementary Tools
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments |