Correlation Between New World and American International

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

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

Diversification Opportunities for New World and American International

0.0

Correlation Coefficient

New World  American International

Pay attention - limited upside

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

Pair Corralation between New World and American International

If you would invest  0.19  in American International Ventures on December 28, 2024 and sell it today you would earn a total of  0.00  from holding American International Ventures or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	95.24%
Values	Daily Returns

New World Gold  vs.  American International Venture

New World Gold

Risk-Adjusted Performance

Very Weak

Over the last 90 days New World Gold has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fragile performance in the last few months, the Stock's technical and fundamental indicators remain rather sound which may send shares a bit higher in April 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

American International

Risk-Adjusted Performance

Very Weak

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

Pair Trading with New World and American International

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

The idea behind New World Gold and American International Ventures 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..