Correlation Between Automatic Data and Odyssean Investment

Can any of the company-specific risk be diversified away by investing in both Automatic Data and Odyssean Investment 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 Odyssean Investment 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 Odyssean Investment Trust, you can compare the effects of market volatilities on Automatic Data and Odyssean Investment 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 Odyssean Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Automatic Data and Odyssean Investment.

Diversification Opportunities for Automatic Data and Odyssean Investment

-0.78

Correlation Coefficient

Automatic Data  Odyssean Investment

Pay attention - limited upside

The 3 months correlation between Automatic and Odyssean is -0.78. Overlapping area represents the amount of risk that can be diversified away by holding Automatic Data Processing and Odyssean Investment Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Odyssean Investment Trust 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 Odyssean Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Odyssean Investment Trust has no effect on the direction of Automatic Data i.e., Automatic Data and Odyssean Investment go up and down completely randomly.

Pair Corralation between Automatic Data and Odyssean Investment

Assuming the 90 days trading horizon Automatic Data Processing is expected to under-perform the Odyssean Investment. But the stock apears to be less risky and, when comparing its historical volatility, Automatic Data Processing is 1.14 times less risky than Odyssean Investment. The stock trades about -0.17 of its potential returns per unit of risk. The Odyssean Investment Trust is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest  15,325  in Odyssean Investment Trust on September 29, 2024 and sell it today you would lose (25.00) from holding Odyssean Investment Trust or give up 0.16% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	95.24%
Values	Daily Returns

Automatic Data Processing  vs.  Odyssean Investment Trust

Automatic Data Processing

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Automatic Data Processing are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Automatic Data may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Odyssean Investment Trust

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Odyssean Investment Trust has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's technical and fundamental indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Pair Trading with Automatic Data and Odyssean Investment

The main advantage of trading using opposite Automatic Data and Odyssean Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Automatic Data position performs unexpectedly, Odyssean Investment 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 Odyssean Investment will offset losses from the drop in Odyssean Investment's long position.

The idea behind Automatic Data Processing and Odyssean Investment Trust 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.

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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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.