Correlation Between Roebuck Food and Automatic Data
Can any of the company-specific risk be diversified away by investing in both Roebuck Food and Automatic Data 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 Roebuck Food and Automatic Data into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Roebuck Food Group and Automatic Data Processing, you can compare the effects of market volatilities on Roebuck Food and Automatic Data 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 Roebuck Food with a short position of Automatic Data. Check out your portfolio center. Please also check ongoing floating volatility patterns of Roebuck Food and Automatic Data.
Diversification Opportunities for Roebuck Food and Automatic Data
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Roebuck and Automatic is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Roebuck Food Group and Automatic Data Processing in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Automatic Data Processing and Roebuck Food 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 Roebuck Food Group are associated (or correlated) with Automatic Data. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Automatic Data Processing has no effect on the direction of Roebuck Food i.e., Roebuck Food and Automatic Data go up and down completely randomly.
Pair Corralation between Roebuck Food and Automatic Data
If you would invest 28,887 in Automatic Data Processing on August 30, 2024 and sell it today you would earn a total of 1,845 from holding Automatic Data Processing or generate 6.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Roebuck Food Group vs. Automatic Data Processing
Performance |
| Timeline |
| Roebuck Food Group |
| Automatic Data Processing |
Roebuck Food and Automatic Data Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Roebuck Food and Automatic Data
The main advantage of trading using opposite Roebuck Food and Automatic Data positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Roebuck Food position performs unexpectedly, Automatic Data 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 Automatic Data will offset losses from the drop in Automatic Data's long position.| Roebuck Food vs. Universal Music Group | Roebuck Food vs. Hansa Investment | Roebuck Food vs. Air Products Chemicals | Roebuck Food vs. Zoom Video Communications |
| Automatic Data vs. Tungsten West PLC | Automatic Data vs. Argo Group Limited | Automatic Data vs. Hardide PLC | Automatic Data vs. Versarien PLC |
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 Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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