Correlation Between ADM Endeavors and All American

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

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

Diversification Opportunities for ADM Endeavors and All American

0.09

Correlation Coefficient

ADM Endeavors  All American

Significant diversification

The 3 months correlation between ADM and All is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding ADM Endeavors and All American Pet in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on All American Pet and ADM Endeavors 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 ADM Endeavors are associated (or correlated) with All American. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of All American Pet has no effect on the direction of ADM Endeavors i.e., ADM Endeavors and All American go up and down completely randomly.

Pair Corralation between ADM Endeavors and All American

Given the investment horizon of 90 days ADM Endeavors is expected to generate 0.42 times more return on investment than All American. However, ADM Endeavors is 2.35 times less risky than All American. It trades about 0.02 of its potential returns per unit of risk. All American Pet is currently generating about -0.13 per unit of risk. If you would invest  4.10  in ADM Endeavors on December 17, 2024 and sell it today you would lose (0.13) from holding ADM Endeavors or give up 3.17% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	95.16%
Values	Daily Returns

ADM Endeavors  vs.  All American Pet

ADM Endeavors

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in ADM Endeavors are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable primary indicators, ADM Endeavors is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

All American Pet

Risk-Adjusted Performance

Very Weak

Over the last 90 days All American Pet has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with ADM Endeavors and All American

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

The idea behind ADM Endeavors and All American Pet 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.