Correlation Between Sky Metals and Autosports
Can any of the company-specific risk be diversified away by investing in both Sky Metals 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 Sky Metals and Autosports into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sky Metals and Autosports Group, you can compare the effects of market volatilities on Sky Metals 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 Sky Metals with a short position of Autosports. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sky Metals and Autosports.
Diversification Opportunities for Sky Metals and Autosports
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Sky and Autosports is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Sky Metals and Autosports Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Autosports Group and Sky Metals 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 Sky Metals 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 Sky Metals i.e., Sky Metals and Autosports go up and down completely randomly.
Pair Corralation between Sky Metals and Autosports
Assuming the 90 days trading horizon Sky Metals is expected to generate 2.9 times more return on investment than Autosports. However, Sky Metals is 2.9 times more volatile than Autosports Group. It trades about -0.05 of its potential returns per unit of risk. Autosports Group is currently generating about -0.57 per unit of risk. If you would invest 5.40 in Sky Metals on September 1, 2024 and sell it today you would lose (0.30) from holding Sky Metals or give up 5.56% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sky Metals vs. Autosports Group
Performance |
| Timeline |
| Sky Metals |
| Autosports Group |
Sky Metals and Autosports Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sky Metals and Autosports
The main advantage of trading using opposite Sky Metals and Autosports positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sky Metals 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.| Sky Metals vs. Carnegie Clean Energy | Sky Metals vs. Nufarm Finance NZ | Sky Metals vs. Richmond Vanadium Technology | Sky Metals vs. Macquarie Technology Group |
| Autosports vs. Summit Resources Limited | Autosports vs. iShares Global Healthcare | Autosports vs. Australian Dairy Farms | Autosports vs. Adriatic Metals 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
Other Complementary Tools
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Global Correlations Find global opportunities by holding instruments from different markets | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments |