Correlation Between Southern Cross and Autosports
Can any of the company-specific risk be diversified away by investing in both Southern Cross 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 Southern Cross and Autosports into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Southern Cross Media and Autosports Group, you can compare the effects of market volatilities on Southern Cross 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 Southern Cross with a short position of Autosports. Check out your portfolio center. Please also check ongoing floating volatility patterns of Southern Cross and Autosports.
Diversification Opportunities for Southern Cross and Autosports
-0.84 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Southern and Autosports is -0.84. Overlapping area represents the amount of risk that can be diversified away by holding Southern Cross Media and Autosports Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Autosports Group and Southern Cross 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 Southern Cross Media 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 Southern Cross i.e., Southern Cross and Autosports go up and down completely randomly.
Pair Corralation between Southern Cross and Autosports
Assuming the 90 days trading horizon Southern Cross Media is expected to generate 1.65 times more return on investment than Autosports. However, Southern Cross is 1.65 times more volatile than Autosports Group. It trades about -0.08 of its potential returns per unit of risk. Autosports Group is currently generating about -0.18 per unit of risk. If you would invest 63.00 in Southern Cross Media on November 2, 2024 and sell it today you would lose (2.00) from holding Southern Cross Media or give up 3.17% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Southern Cross Media vs. Autosports Group
Performance |
| Timeline |
| Southern Cross Media |
| Autosports Group |
Southern Cross and Autosports Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Southern Cross and Autosports
The main advantage of trading using opposite Southern Cross and Autosports positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Southern Cross 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.| Southern Cross vs. Falcon Metals | Southern Cross vs. Perseus Mining | Southern Cross vs. DY6 Metals | Southern Cross vs. Clime Investment Management |
| Autosports vs. Balkan Mining and | Autosports vs. Sky Metals | Autosports vs. De Grey Mining | Autosports vs. Globe Metals Mining |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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