Correlation Between Auto Trader and Gol Intelligent

Can any of the company-specific risk be diversified away by investing in both Auto Trader and Gol Intelligent 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 Auto Trader and Gol Intelligent into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Auto Trader Group and Gol Intelligent Airlines, you can compare the effects of market volatilities on Auto Trader and Gol Intelligent 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 Auto Trader with a short position of Gol Intelligent. Check out your portfolio center. Please also check ongoing floating volatility patterns of Auto Trader and Gol Intelligent.

Diversification Opportunities for Auto Trader and Gol Intelligent

0.0

Correlation Coefficient

Auto Trader  Gol Intelligent

Pay attention - limited upside

The 3 months correlation between Auto and Gol is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Auto Trader Group and Gol Intelligent Airlines in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gol Intelligent Airlines and Auto Trader 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 Auto Trader Group are associated (or correlated) with Gol Intelligent. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gol Intelligent Airlines has no effect on the direction of Auto Trader i.e., Auto Trader and Gol Intelligent go up and down completely randomly.

Pair Corralation between Auto Trader and Gol Intelligent

If you would invest  940.00  in Auto Trader Group on October 22, 2024 and sell it today you would earn a total of  5.00  from holding Auto Trader Group or generate 0.53% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	99.19%
Values	Daily Returns

Auto Trader Group  vs.  Gol Intelligent Airlines

Auto Trader Group

Risk-Adjusted Performance

0 of 100

Very Weak

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

Gol Intelligent Airlines

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Auto Trader and Gol Intelligent

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

The idea behind Auto Trader Group and Gol Intelligent Airlines 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.