Correlation Between Hardide PLC and Autins Group
Can any of the company-specific risk be diversified away by investing in both Hardide PLC 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 Hardide PLC and Autins Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hardide PLC and Autins Group plc, you can compare the effects of market volatilities on Hardide PLC 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 Hardide PLC with a short position of Autins Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hardide PLC and Autins Group.
Diversification Opportunities for Hardide PLC and Autins Group
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Hardide and Autins is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Hardide PLC 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 Hardide PLC 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 Hardide PLC 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 Hardide PLC i.e., Hardide PLC and Autins Group go up and down completely randomly.
Pair Corralation between Hardide PLC and Autins Group
Assuming the 90 days trading horizon Hardide PLC is expected to under-perform the Autins Group. In addition to that, Hardide PLC is 1.03 times more volatile than Autins Group plc. It trades about -0.06 of its total potential returns per unit of risk. Autins Group plc is currently generating about -0.01 per unit of volatility. If you would invest 900.00 in Autins Group plc on September 14, 2024 and sell it today you would lose (225.00) from holding Autins Group plc or give up 25.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.8% |
| Values | Daily Returns |
Hardide PLC vs. Autins Group plc
Performance |
| Timeline |
| Hardide PLC |
| Autins Group plc |
Hardide PLC and Autins Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hardide PLC and Autins Group
The main advantage of trading using opposite Hardide PLC and Autins Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hardide PLC 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.| Hardide PLC vs. The Mercantile Investment | Hardide PLC vs. Trainline Plc | Hardide PLC vs. Gaztransport et Technigaz | Hardide PLC vs. Diversified Energy |
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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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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