Correlation Between Stelar Metals and Autosports
Can any of the company-specific risk be diversified away by investing in both Stelar 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 Stelar Metals and Autosports into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Stelar Metals and Autosports Group, you can compare the effects of market volatilities on Stelar 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 Stelar Metals with a short position of Autosports. Check out your portfolio center. Please also check ongoing floating volatility patterns of Stelar Metals and Autosports.
Diversification Opportunities for Stelar Metals and Autosports
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Stelar and Autosports is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Stelar Metals and Autosports Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Autosports Group and Stelar 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 Stelar 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 Stelar Metals i.e., Stelar Metals and Autosports go up and down completely randomly.
Pair Corralation between Stelar Metals and Autosports
Assuming the 90 days trading horizon Stelar Metals is expected to under-perform the Autosports. In addition to that, Stelar Metals is 1.79 times more volatile than Autosports Group. It trades about -0.05 of its total potential returns per unit of risk. Autosports Group is currently generating about -0.09 per unit of volatility. If you would invest 200.00 in Autosports Group on October 24, 2024 and sell it today you would lose (27.00) from holding Autosports Group or give up 13.5% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Stelar Metals vs. Autosports Group
Performance |
| Timeline |
| Stelar Metals |
| Autosports Group |
Stelar Metals and Autosports Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Stelar Metals and Autosports
The main advantage of trading using opposite Stelar Metals and Autosports positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Stelar 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.| Stelar Metals vs. Torque Metals | Stelar Metals vs. EMvision Medical Devices | Stelar Metals vs. Black Rock Mining | Stelar Metals vs. Everest Metals |
| Autosports vs. Pinnacle Investment Management | Autosports vs. Viva Leisure | Autosports vs. Playside Studios | Autosports vs. Aristocrat Leisure |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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