Correlation Between American Security and Mass Megawat
Can any of the company-specific risk be diversified away by investing in both American Security and Mass Megawat 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 Security and Mass Megawat into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American Security Resources and Mass Megawat Wind, you can compare the effects of market volatilities on American Security and Mass Megawat 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 Security with a short position of Mass Megawat. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Security and Mass Megawat.
Diversification Opportunities for American Security and Mass Megawat
-0.02 | Correlation Coefficient |
Good diversification
The 3 months correlation between American and Mass is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding American Security Resources and Mass Megawat Wind in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mass Megawat Wind and American Security 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 Security Resources are associated (or correlated) with Mass Megawat. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mass Megawat Wind has no effect on the direction of American Security i.e., American Security and Mass Megawat go up and down completely randomly.
Pair Corralation between American Security and Mass Megawat
Given the investment horizon of 90 days American Security is expected to generate 27.81 times less return on investment than Mass Megawat. But when comparing it to its historical volatility, American Security Resources is 9.58 times less risky than Mass Megawat. It trades about 0.03 of its potential returns per unit of risk. Mass Megawat Wind is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 81.00 in Mass Megawat Wind on October 2, 2024 and sell it today you would lose (50.00) from holding Mass Megawat Wind or give up 61.73% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
American Security Resources vs. Mass Megawat Wind
Performance |
Timeline |
American Security |
Mass Megawat Wind |
American Security and Mass Megawat Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with American Security and Mass Megawat
The main advantage of trading using opposite American Security and Mass Megawat positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Security position performs unexpectedly, Mass Megawat 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 Mass Megawat will offset losses from the drop in Mass Megawat's long position.American Security vs. Astra Energy | American Security vs. Alternus Energy Group | American Security vs. Carnegie Clean Energy | American Security vs. Altius Renewable Royalties |
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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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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