Correlation Between Tinybeans Group and Auto Trader
Can any of the company-specific risk be diversified away by investing in both Tinybeans Group 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 Tinybeans Group and Auto Trader into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tinybeans Group Limited and Auto Trader Group, you can compare the effects of market volatilities on Tinybeans Group 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 Tinybeans Group with a short position of Auto Trader. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tinybeans Group and Auto Trader.
Diversification Opportunities for Tinybeans Group and Auto Trader
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Tinybeans and Auto is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Tinybeans Group Limited 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 Tinybeans Group 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 Tinybeans Group Limited 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 Tinybeans Group i.e., Tinybeans Group and Auto Trader go up and down completely randomly.
Pair Corralation between Tinybeans Group and Auto Trader
Assuming the 90 days horizon Tinybeans Group Limited is expected to under-perform the Auto Trader. In addition to that, Tinybeans Group is 3.2 times more volatile than Auto Trader Group. It trades about -0.22 of its total potential returns per unit of risk. Auto Trader Group is currently generating about -0.22 per unit of volatility. If you would invest 288.00 in Auto Trader Group on October 26, 2024 and sell it today you would lose (51.00) from holding Auto Trader Group or give up 17.71% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 98.33% |
| Values | Daily Returns |
Tinybeans Group Limited vs. Auto Trader Group
Performance |
| Timeline |
| Tinybeans Group |
| Auto Trader Group |
Tinybeans Group and Auto Trader Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tinybeans Group and Auto Trader
The main advantage of trading using opposite Tinybeans Group and Auto Trader positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tinybeans Group 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.| Tinybeans Group vs. Brunswick | Tinybeans Group vs. Wabash National | Tinybeans Group vs. Valmont Industries | Tinybeans Group vs. MYR Group |
| Auto Trader vs. Tinybeans Group Limited | Auto Trader vs. DGTL Holdings | Auto Trader vs. Sabio Holdings | Auto Trader vs. Zoomd Technologies |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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