Correlation Between Persimmon Plc and Auto Trader
Can any of the company-specific risk be diversified away by investing in both Persimmon Plc 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 Persimmon Plc and Auto Trader into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Persimmon Plc and Auto Trader Group, you can compare the effects of market volatilities on Persimmon Plc 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 Persimmon Plc with a short position of Auto Trader. Check out your portfolio center. Please also check ongoing floating volatility patterns of Persimmon Plc and Auto Trader.
Diversification Opportunities for Persimmon Plc and Auto Trader
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Persimmon and Auto is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding Persimmon Plc 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 Persimmon 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 Persimmon Plc 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 Persimmon Plc i.e., Persimmon Plc and Auto Trader go up and down completely randomly.
Pair Corralation between Persimmon Plc and Auto Trader
Assuming the 90 days horizon Persimmon Plc is expected to under-perform the Auto Trader. In addition to that, Persimmon Plc is 1.47 times more volatile than Auto Trader Group. It trades about -0.03 of its total potential returns per unit of risk. Auto Trader Group is currently generating about 0.0 per unit of volatility. If you would invest 262.00 in Auto Trader Group on August 30, 2024 and sell it today you would lose (2.00) from holding Auto Trader Group or give up 0.76% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Persimmon Plc vs. Auto Trader Group
Performance |
| Timeline |
| Persimmon Plc |
| Auto Trader Group |
Persimmon Plc and Auto Trader Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Persimmon Plc and Auto Trader
The main advantage of trading using opposite Persimmon Plc and Auto Trader positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Persimmon Plc 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.| Persimmon Plc vs. Greystone Logistics | Persimmon Plc vs. Mill City Ventures | Persimmon Plc vs. Black Diamond Group | Persimmon Plc vs. Tartisan Nickel Corp |
| Auto Trader vs. Tinybeans Group Limited | Auto Trader vs. DGTL Holdings | Auto Trader vs. Sabio Holdings | Auto Trader vs. Zoomd Technologies |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
Other Complementary Tools
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing |