Correlation Between WiseTech Global and Autosports Group
Can any of the company-specific risk be diversified away by investing in both WiseTech Global and Autosports Group 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 WiseTech Global and Autosports Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between WiseTech Global Limited and Autosports Group, you can compare the effects of market volatilities on WiseTech Global and Autosports Group 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 WiseTech Global with a short position of Autosports Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of WiseTech Global and Autosports Group.
Diversification Opportunities for WiseTech Global and Autosports Group
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between WiseTech and Autosports is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding WiseTech Global Limited and Autosports Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Autosports Group and WiseTech Global 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 WiseTech Global Limited are associated (or correlated) with Autosports Group. 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 WiseTech Global i.e., WiseTech Global and Autosports Group go up and down completely randomly.
Pair Corralation between WiseTech Global and Autosports Group
Assuming the 90 days trading horizon WiseTech Global is expected to generate 1.51 times less return on investment than Autosports Group. In addition to that, WiseTech Global is 1.66 times more volatile than Autosports Group. It trades about 0.02 of its total potential returns per unit of risk. Autosports Group is currently generating about 0.05 per unit of volatility. If you would invest 173.00 in Autosports Group on November 9, 2024 and sell it today you would earn a total of 2.00 from holding Autosports Group or generate 1.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
WiseTech Global Limited vs. Autosports Group
Performance |
| Timeline |
| WiseTech Global |
| Autosports Group |
WiseTech Global and Autosports Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with WiseTech Global and Autosports Group
The main advantage of trading using opposite WiseTech Global and Autosports Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WiseTech Global position performs unexpectedly, Autosports Group 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 Group will offset losses from the drop in Autosports Group's long position.| WiseTech Global vs. Viva Leisure | WiseTech Global vs. Norfolk Metals | WiseTech Global vs. Dug Technology | WiseTech Global vs. Maggie Beer Holdings |
| Autosports Group vs. PVW Resources | Autosports Group vs. Woolworths | Autosports Group vs. Wesfarmers | Autosports Group vs. Coles Group |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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