Correlation Between Automatic Bank and Text SA

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

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

Diversification Opportunities for Automatic Bank and Text SA

0.21

Correlation Coefficient

Automatic Bank  Text SA

Modest diversification

The 3 months correlation between Automatic and Text is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Automatic Bank Services and Text SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Text SA and Automatic Bank 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 Automatic Bank Services are associated (or correlated) with Text SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Text SA has no effect on the direction of Automatic Bank i.e., Automatic Bank and Text SA go up and down completely randomly.

Pair Corralation between Automatic Bank and Text SA

Assuming the 90 days horizon Automatic Bank Services is expected to generate 0.45 times more return on investment than Text SA. However, Automatic Bank Services is 2.24 times less risky than Text SA. It trades about 0.12 of its potential returns per unit of risk. Text SA is currently generating about 0.0 per unit of risk. If you would invest  568.00  in Automatic Bank Services on August 15, 2025 and sell it today you would earn a total of  22.00  from holding Automatic Bank Services or generate 3.87% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.44%
Values	Daily Returns

Automatic Bank Services  vs.  Text SA

Automatic Bank Services

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in Automatic Bank Services are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, Automatic Bank is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Text SA

Risk-Adjusted Performance

Weakest

Over the last 90 days Text SA has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Text SA is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Automatic Bank and Text SA

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

The idea behind Automatic Bank Services and Text SA 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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.