Correlation Between EPlay Digital and AutoNation

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Can any of the company-specific risk be diversified away by investing in both EPlay Digital and AutoNation 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 EPlay Digital and AutoNation into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ePlay Digital and AutoNation, you can compare the effects of market volatilities on EPlay Digital and AutoNation 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 EPlay Digital with a short position of AutoNation. Check out your portfolio center. Please also check ongoing floating volatility patterns of EPlay Digital and AutoNation.

Diversification Opportunities for EPlay Digital and AutoNation

0.0
  Correlation Coefficient

Pay attention - limited upside

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

Pair Corralation between EPlay Digital and AutoNation

If you would invest  14,870  in AutoNation on April 23, 2025 and sell it today you would earn a total of  2,040  from holding AutoNation or generate 13.72% return on investment over 90 days.
Time Period3 Months [change]
DirectionFlat 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

ePlay Digital  vs.  AutoNation

 Performance 
       Timeline  
ePlay Digital 

Risk-Adjusted Performance

Very Weak

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

Risk-Adjusted Performance

Good

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in AutoNation are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, AutoNation reported solid returns over the last few months and may actually be approaching a breakup point.

EPlay Digital and AutoNation Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with EPlay Digital and AutoNation

The main advantage of trading using opposite EPlay Digital and AutoNation positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EPlay Digital position performs unexpectedly, AutoNation 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 AutoNation will offset losses from the drop in AutoNation's long position.
The idea behind ePlay Digital and AutoNation 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.
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 Transaction History module to view history of all your transactions and understand their impact on performance.

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