Correlation Between Safety Shot and Carsales
Can any of the company-specific risk be diversified away by investing in both Safety Shot and Carsales 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 Safety Shot and Carsales into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Safety Shot and CarsalesCom Ltd ADR, you can compare the effects of market volatilities on Safety Shot and Carsales 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 Safety Shot with a short position of Carsales. Check out your portfolio center. Please also check ongoing floating volatility patterns of Safety Shot and Carsales.
Diversification Opportunities for Safety Shot and Carsales
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Safety and Carsales is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Safety Shot and CarsalesCom Ltd ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CarsalesCom ADR and Safety Shot 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 Safety Shot are associated (or correlated) with Carsales. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CarsalesCom ADR has no effect on the direction of Safety Shot i.e., Safety Shot and Carsales go up and down completely randomly.
Pair Corralation between Safety Shot and Carsales
Given the investment horizon of 90 days Safety Shot is expected to under-perform the Carsales. In addition to that, Safety Shot is 1.76 times more volatile than CarsalesCom Ltd ADR. It trades about -0.25 of its total potential returns per unit of risk. CarsalesCom Ltd ADR is currently generating about -0.07 per unit of volatility. If you would invest 5,196 in CarsalesCom Ltd ADR on October 26, 2024 and sell it today you would lose (646.00) from holding CarsalesCom Ltd ADR or give up 12.43% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Safety Shot vs. CarsalesCom Ltd ADR
Performance |
| Timeline |
| Safety Shot |
| CarsalesCom ADR |
Safety Shot and Carsales Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Safety Shot and Carsales
The main advantage of trading using opposite Safety Shot and Carsales positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Safety Shot position performs unexpectedly, Carsales 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 Carsales will offset losses from the drop in Carsales' long position.| Safety Shot vs. NiSource | Safety Shot vs. Antero Midstream Partners | Safety Shot vs. Western Midstream Partners | Safety Shot vs. NioCorp Developments Ltd |
| Carsales vs. Quizam Media | Carsales vs. DGTL Holdings | Carsales vs. Tinybeans Group Limited | Carsales vs. Sabio Holdings |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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