Correlation Between LABOCANNA and AutoNation

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

By analyzing existing cross correlation between LABOCANNA SA ZY 10 and AutoNation, you can compare the effects of market volatilities on LABOCANNA 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 LABOCANNA with a short position of AutoNation. Check out your portfolio center. Please also check ongoing floating volatility patterns of LABOCANNA and AutoNation.

Diversification Opportunities for LABOCANNA and AutoNation

-0.73

Correlation Coefficient

LABOCANNA  AutoNation

Pay attention - limited upside

The 3 months correlation between LABOCANNA and AutoNation is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding LABOCANNA SA ZY 10 and AutoNation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AutoNation and LABOCANNA 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 LABOCANNA SA ZY 10 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 LABOCANNA i.e., LABOCANNA and AutoNation go up and down completely randomly.

Pair Corralation between LABOCANNA and AutoNation

Assuming the 90 days horizon LABOCANNA SA ZY 10 is expected to under-perform the AutoNation. But the stock apears to be less risky and, when comparing its historical volatility, LABOCANNA SA ZY 10 is 1.08 times less risky than AutoNation. The stock trades about -0.14 of its potential returns per unit of risk. The AutoNation is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest  15,450  in AutoNation on May 1, 2025 and sell it today you would earn a total of  1,475  from holding AutoNation or generate 9.55% return on investment over 90 days.

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

LABOCANNA SA ZY 10  vs.  AutoNation

LABOCANNA SA ZY

Risk-Adjusted Performance

Very Weak

Over the last 90 days LABOCANNA SA ZY 10 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in August 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

AutoNation

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in AutoNation are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, AutoNation may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with LABOCANNA and AutoNation

The main advantage of trading using opposite LABOCANNA and AutoNation positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LABOCANNA 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 LABOCANNA SA ZY 10 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.