Correlation Between Aftermaster and American Films

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

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

Diversification Opportunities for Aftermaster and American Films

0.0

Correlation Coefficient

Aftermaster  American Films

Pay attention - limited upside

The 3 months correlation between Aftermaster and American is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Aftermaster and American Films in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Films and Aftermaster 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 Aftermaster are associated (or correlated) with American Films. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American Films has no effect on the direction of Aftermaster i.e., Aftermaster and American Films go up and down completely randomly.

Pair Corralation between Aftermaster and American Films

If you would invest  15.00  in American Films on October 7, 2024 and sell it today you would lose (6.00) from holding American Films or give up 40.0% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	95.35%
Values	Daily Returns

Aftermaster  vs.  American Films

Aftermaster

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Aftermaster has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Aftermaster is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

American Films

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in American Films are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite quite weak technical and fundamental indicators, American Films disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Aftermaster and American Films

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

The idea behind Aftermaster and American Films 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.