Correlation Between Amer Sports, and American Outdoor
Can any of the company-specific risk be diversified away by investing in both Amer Sports, and American Outdoor 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 Amer Sports, and American Outdoor into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Amer Sports, and American Outdoor Brands, you can compare the effects of market volatilities on Amer Sports, and American Outdoor 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 Amer Sports, with a short position of American Outdoor. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amer Sports, and American Outdoor.
Diversification Opportunities for Amer Sports, and American Outdoor
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Amer and American is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Amer Sports, and American Outdoor Brands in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Outdoor Brands and Amer Sports, 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 Amer Sports, are associated (or correlated) with American Outdoor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American Outdoor Brands has no effect on the direction of Amer Sports, i.e., Amer Sports, and American Outdoor go up and down completely randomly.
Pair Corralation between Amer Sports, and American Outdoor
Allowing for the 90-day total investment horizon Amer Sports, is expected to generate 4.38 times less return on investment than American Outdoor. But when comparing it to its historical volatility, Amer Sports, is 2.51 times less risky than American Outdoor. It trades about 0.27 of its potential returns per unit of risk. American Outdoor Brands is currently generating about 0.46 of returns per unit of risk over similar time horizon. If you would invest 975.00 in American Outdoor Brands on September 28, 2024 and sell it today you would earn a total of 565.00 from holding American Outdoor Brands or generate 57.95% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Amer Sports, vs. American Outdoor Brands
Performance |
Timeline |
Amer Sports, |
American Outdoor Brands |
Amer Sports, and American Outdoor Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Amer Sports, and American Outdoor
The main advantage of trading using opposite Amer Sports, and American Outdoor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amer Sports, position performs unexpectedly, American Outdoor 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 Outdoor will offset losses from the drop in American Outdoor's long position.Amer Sports, vs. Brunswick | Amer Sports, vs. BRP Inc | Amer Sports, vs. Vision Marine Technologies | Amer Sports, vs. VOXX International |
American Outdoor vs. Clarus Corp | American Outdoor vs. Escalade Incorporated | American Outdoor vs. Johnson Outdoors | American Outdoor vs. JAKKS Pacific |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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