Correlation Between Impala Platinum and Auto Trader
Can any of the company-specific risk be diversified away by investing in both Impala Platinum 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 Impala Platinum and Auto Trader into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Impala Platinum Holdings and Auto Trader Group, you can compare the effects of market volatilities on Impala Platinum 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 Impala Platinum with a short position of Auto Trader. Check out your portfolio center. Please also check ongoing floating volatility patterns of Impala Platinum and Auto Trader.
Diversification Opportunities for Impala Platinum and Auto Trader
-0.04 | Correlation Coefficient |
Good diversification
The 3 months correlation between Impala and Auto is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Impala Platinum Holdings 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 Impala Platinum 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 Impala Platinum Holdings 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 Impala Platinum i.e., Impala Platinum and Auto Trader go up and down completely randomly.
Pair Corralation between Impala Platinum and Auto Trader
Assuming the 90 days trading horizon Impala Platinum Holdings is expected to generate 3.18 times more return on investment than Auto Trader. However, Impala Platinum is 3.18 times more volatile than Auto Trader Group. It trades about 0.07 of its potential returns per unit of risk. Auto Trader Group is currently generating about 0.04 per unit of risk. If you would invest 430.00 in Impala Platinum Holdings on September 3, 2024 and sell it today you would earn a total of 126.00 from holding Impala Platinum Holdings or generate 29.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Impala Platinum Holdings vs. Auto Trader Group
Performance |
| Timeline |
| Impala Platinum Holdings |
| Auto Trader Group |
Impala Platinum and Auto Trader Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Impala Platinum and Auto Trader
The main advantage of trading using opposite Impala Platinum and Auto Trader positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Impala Platinum 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.| Impala Platinum vs. WESTLAKE CHEMICAL | Impala Platinum vs. Cal Maine Foods | Impala Platinum vs. CAL MAINE FOODS | Impala Platinum vs. Westlake Chemical |
| Auto Trader vs. Soken Chemical Engineering | Auto Trader vs. MEDICAL FACILITIES NEW | Auto Trader vs. Merit Medical Systems | Auto Trader vs. Westlake Chemical |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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