Correlation Between Autosports and AiMedia Technologies
Can any of the company-specific risk be diversified away by investing in both Autosports and AiMedia Technologies 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 Autosports and AiMedia Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Autosports Group and AiMedia Technologies, you can compare the effects of market volatilities on Autosports and AiMedia Technologies 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 Autosports with a short position of AiMedia Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Autosports and AiMedia Technologies.
Diversification Opportunities for Autosports and AiMedia Technologies
0.01 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Autosports and AiMedia is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Autosports Group and AiMedia Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AiMedia Technologies and Autosports 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 Autosports Group are associated (or correlated) with AiMedia Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AiMedia Technologies has no effect on the direction of Autosports i.e., Autosports and AiMedia Technologies go up and down completely randomly.
Pair Corralation between Autosports and AiMedia Technologies
Assuming the 90 days trading horizon Autosports Group is expected to under-perform the AiMedia Technologies. But the stock apears to be less risky and, when comparing its historical volatility, Autosports Group is 2.45 times less risky than AiMedia Technologies. The stock trades about -0.12 of its potential returns per unit of risk. The AiMedia Technologies is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 69.00 in AiMedia Technologies on September 26, 2024 and sell it today you would earn a total of 24.00 from holding AiMedia Technologies or generate 34.78% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Autosports Group vs. AiMedia Technologies
Performance |
Timeline |
Autosports Group |
AiMedia Technologies |
Autosports and AiMedia Technologies Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Autosports and AiMedia Technologies
The main advantage of trading using opposite Autosports and AiMedia Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Autosports position performs unexpectedly, AiMedia Technologies 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 AiMedia Technologies will offset losses from the drop in AiMedia Technologies' long position.Autosports vs. Bio Gene Technology | Autosports vs. Richmond Vanadium Technology | Autosports vs. Galena Mining | Autosports vs. Actinogen Medical |
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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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