Correlation Between Marvel Gold and Autosports
Can any of the company-specific risk be diversified away by investing in both Marvel Gold and Autosports 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 Marvel Gold and Autosports into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Marvel Gold and Autosports Group, you can compare the effects of market volatilities on Marvel Gold and Autosports 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 Marvel Gold with a short position of Autosports. Check out your portfolio center. Please also check ongoing floating volatility patterns of Marvel Gold and Autosports.
Diversification Opportunities for Marvel Gold and Autosports
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Marvel and Autosports is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Marvel Gold and Autosports Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Autosports Group and Marvel Gold 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 Marvel Gold are associated (or correlated) with Autosports. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Autosports Group has no effect on the direction of Marvel Gold i.e., Marvel Gold and Autosports go up and down completely randomly.
Pair Corralation between Marvel Gold and Autosports
Assuming the 90 days trading horizon Marvel Gold is expected to generate 7.21 times more return on investment than Autosports. However, Marvel Gold is 7.21 times more volatile than Autosports Group. It trades about -0.06 of its potential returns per unit of risk. Autosports Group is currently generating about -0.48 per unit of risk. If you would invest 1.10 in Marvel Gold on September 3, 2024 and sell it today you would lose (0.20) from holding Marvel Gold or give up 18.18% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Marvel Gold vs. Autosports Group
Performance |
| Timeline |
| Marvel Gold |
| Autosports Group |
Marvel Gold and Autosports Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Marvel Gold and Autosports
The main advantage of trading using opposite Marvel Gold and Autosports positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Marvel Gold position performs unexpectedly, Autosports 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 Autosports will offset losses from the drop in Autosports' long position.| Marvel Gold vs. Autosports Group | Marvel Gold vs. BTC Health Limited | Marvel Gold vs. Austco Healthcare | Marvel Gold vs. Carnegie Clean Energy |
| Autosports vs. Westpac Banking | Autosports vs. Champion Iron | Autosports vs. iShares Global Healthcare | Autosports vs. Peel Mining |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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