Correlation Between Automatic Data and Secure Property

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

Diversification Opportunities for Automatic Data and Secure Property

0.0

Correlation Coefficient

Automatic Data  Secure Property

Pay attention - limited upside

The 3 months correlation between Automatic and Secure is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Automatic Data Processing and Secure Property Development in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Secure Property Deve 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 Secure Property. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Secure Property Deve has no effect on the direction of Automatic Data i.e., Automatic Data and Secure Property go up and down completely randomly.

Pair Corralation between Automatic Data and Secure Property

If you would invest  27,719  in Automatic Data Processing on September 15, 2024 and sell it today you would earn a total of  2,257  from holding Automatic Data Processing or generate 8.14% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Automatic Data Processing  vs.  Secure Property Development

Automatic Data Processing

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Automatic Data Processing are ranked lower than 9 (%) 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.

Secure Property Deve

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Secure Property Development has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Secure Property is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Automatic Data and Secure Property

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

The idea behind Automatic Data Processing and Secure Property Development 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.