Correlation Between Synthomer Plc and Auto Trader
Can any of the company-specific risk be diversified away by investing in both Synthomer Plc and Auto Trader 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 Synthomer Plc and Auto Trader into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Synthomer plc and Auto Trader Group, you can compare the effects of market volatilities on Synthomer Plc and Auto Trader 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 Synthomer Plc with a short position of Auto Trader. Check out your portfolio center. Please also check ongoing floating volatility patterns of Synthomer Plc and Auto Trader.
Diversification Opportunities for Synthomer Plc and Auto Trader
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Synthomer and Auto is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Synthomer plc and Auto Trader Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Auto Trader Group and Synthomer Plc 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 Synthomer plc are associated (or correlated) with Auto Trader. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Auto Trader Group has no effect on the direction of Synthomer Plc i.e., Synthomer Plc and Auto Trader go up and down completely randomly.
Pair Corralation between Synthomer Plc and Auto Trader
Assuming the 90 days trading horizon Synthomer plc is expected to under-perform the Auto Trader. In addition to that, Synthomer Plc is 1.42 times more volatile than Auto Trader Group. It trades about -0.1 of its total potential returns per unit of risk. Auto Trader Group is currently generating about -0.13 per unit of volatility. If you would invest 88,040 in Auto Trader Group on August 26, 2024 and sell it today you would lose (5,040) from holding Auto Trader Group or give up 5.72% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Synthomer plc vs. Auto Trader Group
Performance |
| Timeline |
| Synthomer plc |
| Auto Trader Group |
Synthomer Plc and Auto Trader Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Synthomer Plc and Auto Trader
The main advantage of trading using opposite Synthomer Plc and Auto Trader positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Synthomer Plc position performs unexpectedly, Auto Trader 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 Auto Trader will offset losses from the drop in Auto Trader's long position.| Synthomer Plc vs. Givaudan SA | Synthomer Plc vs. Antofagasta PLC | Synthomer Plc vs. Centamin PLC | Synthomer Plc vs. Atalaya Mining |
| Auto Trader vs. Ondine Biomedical | Auto Trader vs. Europa Metals | Auto Trader vs. Revolution Beauty Group | Auto Trader vs. Biome Technologies 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
Other Complementary Tools
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| CEOs Directory Screen CEOs from public companies around the world | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon |