Correlation Between CarsalesCom and HUDSON GLOBAL
Can any of the company-specific risk be diversified away by investing in both CarsalesCom and HUDSON GLOBAL 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 CarsalesCom and HUDSON GLOBAL into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CarsalesCom and HUDSON GLOBAL INCDL 001, you can compare the effects of market volatilities on CarsalesCom and HUDSON GLOBAL 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 CarsalesCom with a short position of HUDSON GLOBAL. Check out your portfolio center. Please also check ongoing floating volatility patterns of CarsalesCom and HUDSON GLOBAL.
Diversification Opportunities for CarsalesCom and HUDSON GLOBAL
-0.59 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between CarsalesCom and HUDSON is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding CarsalesCom and HUDSON GLOBAL INCDL 001 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HUDSON GLOBAL INCDL and CarsalesCom 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 CarsalesCom are associated (or correlated) with HUDSON GLOBAL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HUDSON GLOBAL INCDL has no effect on the direction of CarsalesCom i.e., CarsalesCom and HUDSON GLOBAL go up and down completely randomly.
Pair Corralation between CarsalesCom and HUDSON GLOBAL
Assuming the 90 days horizon CarsalesCom is expected to generate 0.38 times more return on investment than HUDSON GLOBAL. However, CarsalesCom is 2.66 times less risky than HUDSON GLOBAL. It trades about 0.46 of its potential returns per unit of risk. HUDSON GLOBAL INCDL 001 is currently generating about 0.05 per unit of risk. If you would invest 2,220 in CarsalesCom on August 30, 2024 and sell it today you would earn a total of 300.00 from holding CarsalesCom or generate 13.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
CarsalesCom vs. HUDSON GLOBAL INCDL 001
Performance |
| Timeline |
| CarsalesCom |
| HUDSON GLOBAL INCDL |
CarsalesCom and HUDSON GLOBAL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CarsalesCom and HUDSON GLOBAL
The main advantage of trading using opposite CarsalesCom and HUDSON GLOBAL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CarsalesCom position performs unexpectedly, HUDSON GLOBAL 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 HUDSON GLOBAL will offset losses from the drop in HUDSON GLOBAL's long position.| CarsalesCom vs. Transport International Holdings | CarsalesCom vs. Verizon Communications | CarsalesCom vs. Gamma Communications plc | CarsalesCom vs. SPORT LISBOA E |
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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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