Correlation Between Globe Trade and Auto Trader
Can any of the company-specific risk be diversified away by investing in both Globe Trade 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 Globe Trade and Auto Trader into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Globe Trade Centre and Auto Trader Group, you can compare the effects of market volatilities on Globe Trade 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 Globe Trade with a short position of Auto Trader. Check out your portfolio center. Please also check ongoing floating volatility patterns of Globe Trade and Auto Trader.
Diversification Opportunities for Globe Trade and Auto Trader
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Globe and Auto is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Globe Trade Centre 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 Globe Trade 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 Globe Trade Centre 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 Globe Trade i.e., Globe Trade and Auto Trader go up and down completely randomly.
Pair Corralation between Globe Trade and Auto Trader
If you would invest 101.00 in Globe Trade Centre on September 1, 2024 and sell it today you would earn a total of 0.00 from holding Globe Trade Centre or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Globe Trade Centre vs. Auto Trader Group
Performance |
| Timeline |
| Globe Trade Centre |
| Auto Trader Group |
Globe Trade and Auto Trader Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Globe Trade and Auto Trader
The main advantage of trading using opposite Globe Trade and Auto Trader positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Globe Trade 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.| Globe Trade vs. SIVERS SEMICONDUCTORS AB | Globe Trade vs. Darden Restaurants | Globe Trade vs. Reliance Steel Aluminum | Globe Trade vs. Q2M Managementberatung AG |
| Auto Trader vs. FORMPIPE SOFTWARE AB | Auto Trader vs. UNITED UTILITIES GR | Auto Trader vs. COPLAND ROAD CAPITAL | Auto Trader vs. Algonquin Power Utilities |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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