Correlation Between Chrysalis Investments and Auto Trader

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

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

Diversification Opportunities for Chrysalis Investments and Auto Trader

-0.14

Correlation Coefficient

Chrysalis Investments  Auto Trader

Good diversification

The 3 months correlation between Chrysalis and Auto is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Chrysalis Investments and Auto Trader Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Auto Trader Group and Chrysalis Investments 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 Chrysalis Investments are associated (or correlated) with Auto Trader. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Auto Trader Group has no effect on the direction of Chrysalis Investments i.e., Chrysalis Investments and Auto Trader go up and down completely randomly.

Pair Corralation between Chrysalis Investments and Auto Trader

Assuming the 90 days trading horizon Chrysalis Investments is expected to generate 0.75 times more return on investment than Auto Trader. However, Chrysalis Investments is 1.34 times less risky than Auto Trader. It trades about 0.22 of its potential returns per unit of risk. Auto Trader Group is currently generating about 0.02 per unit of risk. If you would invest  9,420  in Chrysalis Investments on April 24, 2025 and sell it today you would earn a total of  1,700  from holding Chrysalis Investments or generate 18.05% return on investment over 90 days.

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

Chrysalis Investments  vs.  Auto Trader Group

Chrysalis Investments

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Chrysalis Investments are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Chrysalis Investments unveiled solid returns over the last few months and may actually be approaching a breakup point.

Auto Trader Group

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Auto Trader Group are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Auto Trader is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Chrysalis Investments and Auto Trader

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

The idea behind Chrysalis Investments and Auto Trader Group 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 Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.