Correlation Between Santana Minerals and Autosports
Can any of the company-specific risk be diversified away by investing in both Santana Minerals 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 Santana Minerals and Autosports into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Santana Minerals and Autosports Group, you can compare the effects of market volatilities on Santana Minerals 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 Santana Minerals with a short position of Autosports. Check out your portfolio center. Please also check ongoing floating volatility patterns of Santana Minerals and Autosports.
Diversification Opportunities for Santana Minerals and Autosports
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Santana and Autosports is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Santana Minerals and Autosports Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Autosports Group and Santana Minerals 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 Santana Minerals 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 Santana Minerals i.e., Santana Minerals and Autosports go up and down completely randomly.
Pair Corralation between Santana Minerals and Autosports
Assuming the 90 days trading horizon Santana Minerals is expected to generate 2.44 times more return on investment than Autosports. However, Santana Minerals is 2.44 times more volatile than Autosports Group. It trades about 0.04 of its potential returns per unit of risk. Autosports Group is currently generating about -0.05 per unit of risk. If you would invest 37.00 in Santana Minerals on October 17, 2024 and sell it today you would earn a total of 9.00 from holding Santana Minerals or generate 24.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 99.57% |
| Values | Daily Returns |
Santana Minerals vs. Autosports Group
Performance |
| Timeline |
| Santana Minerals |
| Autosports Group |
Santana Minerals and Autosports Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Santana Minerals and Autosports
The main advantage of trading using opposite Santana Minerals and Autosports positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Santana Minerals 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.| Santana Minerals vs. EROAD | Santana Minerals vs. Dug Technology | Santana Minerals vs. Retail Food Group | Santana Minerals vs. Queste Communications |
| Autosports vs. Hammer Metals | Autosports vs. Diversified United Investment | Autosports vs. Torque Metals | Autosports vs. Pinnacle Investment Management |
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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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