Correlation Between American Diversified and Sgd Holdings

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

By analyzing existing cross correlation between American Diversified Holdings and Sgd Holdings, you can compare the effects of market volatilities on American Diversified and Sgd Holdings 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 American Diversified with a short position of Sgd Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Diversified and Sgd Holdings.

Diversification Opportunities for American Diversified and Sgd Holdings

-0.14

Correlation Coefficient

American Diversified  Sgd Holdings

Good diversification

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

Pair Corralation between American Diversified and Sgd Holdings

Given the investment horizon of 90 days American Diversified Holdings is expected to under-perform the Sgd Holdings. In addition to that, American Diversified is 1.63 times more volatile than Sgd Holdings. It trades about 0.0 of its total potential returns per unit of risk. Sgd Holdings is currently generating about 0.04 per unit of volatility. If you would invest  0.47  in Sgd Holdings on December 28, 2024 and sell it today you would lose (0.01) from holding Sgd Holdings or give up 2.13% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	96.77%
Values	Daily Returns

American Diversified Holdings  vs.  Sgd Holdings

American Diversified

Risk-Adjusted Performance

Very Weak

Over the last 90 days American Diversified Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound technical indicators, American Diversified is not utilizing all of its potentials. The recent stock price tumult, may contribute to shorter-term losses for the shareholders.

Sgd Holdings

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Sgd Holdings are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite fairly fragile fundamental indicators, Sgd Holdings demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with American Diversified and Sgd Holdings

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

The idea behind American Diversified Holdings and Sgd Holdings 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.