Correlation Between SL Private and Automatic Data
Can any of the company-specific risk be diversified away by investing in both SL Private and Automatic Data 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 SL Private and Automatic Data into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SL Private Equity and Automatic Data Processing, you can compare the effects of market volatilities on SL Private and Automatic Data 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 SL Private with a short position of Automatic Data. Check out your portfolio center. Please also check ongoing floating volatility patterns of SL Private and Automatic Data.
Diversification Opportunities for SL Private and Automatic Data
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between SLPE and Automatic is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding SL Private Equity and Automatic Data Processing in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Automatic Data Processing and SL Private 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 SL Private Equity are associated (or correlated) with Automatic Data. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Automatic Data Processing has no effect on the direction of SL Private i.e., SL Private and Automatic Data go up and down completely randomly.
Pair Corralation between SL Private and Automatic Data
Assuming the 90 days trading horizon SL Private Equity is expected to under-perform the Automatic Data. But the stock apears to be less risky and, when comparing its historical volatility, SL Private Equity is 1.08 times less risky than Automatic Data. The stock trades about -0.05 of its potential returns per unit of risk. The Automatic Data Processing is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 29,110 in Automatic Data Processing on April 22, 2025 and sell it today you would earn a total of 1,150 from holding Automatic Data Processing or generate 3.95% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 96.88% |
Values | Daily Returns |
SL Private Equity vs. Automatic Data Processing
Performance |
Timeline |
SL Private Equity |
Automatic Data Processing |
SL Private and Automatic Data Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with SL Private and Automatic Data
The main advantage of trading using opposite SL Private and Automatic Data positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SL Private position performs unexpectedly, Automatic Data 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 Automatic Data will offset losses from the drop in Automatic Data's long position.SL Private vs. Fortuna Silver Mines | SL Private vs. InterContinental Hotels Group | SL Private vs. bet at home AG | SL Private vs. Pets at Home |
Automatic Data vs. Pets at Home | Automatic Data vs. Tata Steel Limited | Automatic Data vs. Cairo Communication SpA | Automatic Data vs. Baker Steel Resources |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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