Correlation Between American Vanguard and Trump Media

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

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

Diversification Opportunities for American Vanguard and Trump Media

-0.43

Correlation Coefficient

American Vanguard  Trump Media

Very good diversification

The 3 months correlation between American and Trump is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding American Vanguard and Trump Media Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Trump Media Technology and American Vanguard 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 Vanguard are associated (or correlated) with Trump Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Trump Media Technology has no effect on the direction of American Vanguard i.e., American Vanguard and Trump Media go up and down completely randomly.

Pair Corralation between American Vanguard and Trump Media

Considering the 90-day investment horizon American Vanguard is expected to generate 0.47 times more return on investment than Trump Media. However, American Vanguard is 2.13 times less risky than Trump Media. It trades about 0.32 of its potential returns per unit of risk. Trump Media Technology is currently generating about 0.14 per unit of risk. If you would invest  435.00  in American Vanguard on October 23, 2024 and sell it today you would earn a total of  73.00  from holding American Vanguard or generate 16.78% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

American Vanguard  vs.  Trump Media Technology

American Vanguard

Risk-Adjusted Performance

0 of 100

Very Weak

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

Trump Media Technology

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Trump Media Technology are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady forward-looking indicators, Trump Media unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with American Vanguard and Trump Media

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

The idea behind American Vanguard and Trump Media Technology 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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.