Correlation Between Automatic Data and In Style
Can any of the company-specific risk be diversified away by investing in both Automatic Data and In Style 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 Automatic Data and In Style into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Automatic Data Processing and in Style Group, you can compare the effects of market volatilities on Automatic Data and In Style 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 Automatic Data with a short position of In Style. Check out your portfolio center. Please also check ongoing floating volatility patterns of Automatic Data and In Style.
Diversification Opportunities for Automatic Data and In Style
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Automatic and ITS is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Automatic Data Processing and in Style Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on in Style Group and Automatic Data 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 Automatic Data Processing are associated (or correlated) with In Style. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of in Style Group has no effect on the direction of Automatic Data i.e., Automatic Data and In Style go up and down completely randomly.
Pair Corralation between Automatic Data and In Style
Assuming the 90 days trading horizon Automatic Data Processing is expected to generate 3.34 times more return on investment than In Style. However, Automatic Data is 3.34 times more volatile than in Style Group. It trades about 0.06 of its potential returns per unit of risk. in Style Group is currently generating about 0.03 per unit of risk. If you would invest 23,687 in Automatic Data Processing on September 26, 2024 and sell it today you would earn a total of 5,952 from holding Automatic Data Processing or generate 25.13% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 97.66% |
Values | Daily Returns |
Automatic Data Processing vs. in Style Group
Performance |
Timeline |
Automatic Data Processing |
in Style Group |
Automatic Data and In Style Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Automatic Data and In Style
The main advantage of trading using opposite Automatic Data and In Style positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Automatic Data position performs unexpectedly, In Style 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 In Style will offset losses from the drop in In Style's long position.Automatic Data vs. AfriTin Mining | Automatic Data vs. Silver Bullet Data | Automatic Data vs. Monster Beverage Corp | Automatic Data vs. Blackrock World Mining |
In Style vs. Catalyst Media Group | In Style vs. CATLIN GROUP | In Style vs. Tamburi Investment Partners | In Style vs. Magnora ASA |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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