Correlation Between Carsales and ATOSS Software
Can any of the company-specific risk be diversified away by investing in both Carsales and ATOSS Software 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 Carsales and ATOSS Software into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Carsales and ATOSS Software SE, you can compare the effects of market volatilities on Carsales and ATOSS Software 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 Carsales with a short position of ATOSS Software. Check out your portfolio center. Please also check ongoing floating volatility patterns of Carsales and ATOSS Software.
Diversification Opportunities for Carsales and ATOSS Software
-0.57 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Carsales and ATOSS is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Carsales and ATOSS Software SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ATOSS Software SE and Carsales 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 Carsales are associated (or correlated) with ATOSS Software. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ATOSS Software SE has no effect on the direction of Carsales i.e., Carsales and ATOSS Software go up and down completely randomly.
Pair Corralation between Carsales and ATOSS Software
Assuming the 90 days trading horizon Carsales is expected to under-perform the ATOSS Software. But the stock apears to be less risky and, when comparing its historical volatility, Carsales is 1.38 times less risky than ATOSS Software. The stock trades about -0.24 of its potential returns per unit of risk. The ATOSS Software SE is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest 12,000 in ATOSS Software SE on September 15, 2024 and sell it today you would lose (140.00) from holding ATOSS Software SE or give up 1.17% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Carsales vs. ATOSS Software SE
Performance |
| Timeline |
| Carsales |
| ATOSS Software SE |
Carsales and ATOSS Software Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Carsales and ATOSS Software
The main advantage of trading using opposite Carsales and ATOSS Software positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Carsales position performs unexpectedly, ATOSS Software 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 ATOSS Software will offset losses from the drop in ATOSS Software's long position.The idea behind Carsales and ATOSS Software SE pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| ATOSS Software vs. COLUMBIA SPORTSWEAR | ATOSS Software vs. Carsales | ATOSS Software vs. PLAYTIKA HOLDING DL 01 | ATOSS Software vs. INTER CARS SA |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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