Correlation Between Yara International and AutoStore Holdings
Can any of the company-specific risk be diversified away by investing in both Yara International and AutoStore Holdings 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 Yara International and AutoStore Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Yara International ASA and AutoStore Holdings, you can compare the effects of market volatilities on Yara International and AutoStore Holdings 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 Yara International with a short position of AutoStore Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Yara International and AutoStore Holdings.
Diversification Opportunities for Yara International and AutoStore Holdings
-0.25 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Yara and AutoStore is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding Yara International ASA and AutoStore Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AutoStore Holdings and Yara International 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 Yara International ASA are associated (or correlated) with AutoStore Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AutoStore Holdings has no effect on the direction of Yara International i.e., Yara International and AutoStore Holdings go up and down completely randomly.
Pair Corralation between Yara International and AutoStore Holdings
Assuming the 90 days trading horizon Yara International ASA is expected to generate 0.46 times more return on investment than AutoStore Holdings. However, Yara International ASA is 2.2 times less risky than AutoStore Holdings. It trades about -0.01 of its potential returns per unit of risk. AutoStore Holdings is currently generating about -0.02 per unit of risk. If you would invest 38,904 in Yara International ASA on November 2, 2024 and sell it today you would lose (4,404) from holding Yara International ASA or give up 11.32% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Yara International ASA vs. AutoStore Holdings
Performance |
| Timeline |
| Yara International ASA |
| AutoStore Holdings |
Yara International and AutoStore Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Yara International and AutoStore Holdings
The main advantage of trading using opposite Yara International and AutoStore Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Yara International position performs unexpectedly, AutoStore Holdings 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 AutoStore Holdings will offset losses from the drop in AutoStore Holdings' long position.| Yara International vs. Telenor ASA | Yara International vs. Orkla ASA | Yara International vs. DnB ASA | Yara International vs. Storebrand ASA |
| AutoStore Holdings vs. Nordic Semiconductor ASA | AutoStore Holdings vs. Aker BP ASA | AutoStore Holdings vs. SalMar ASA | AutoStore Holdings vs. Scatec Solar OL |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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