Correlation Between ON24 and AMERICAN

Can any of the company-specific risk be diversified away by investing in both ON24 and AMERICAN 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 ON24 and AMERICAN into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between ON24 Inc and AMERICAN TOWER P, you can compare the effects of market volatilities on ON24 and AMERICAN 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 ON24 with a short position of AMERICAN. Check out your portfolio center. Please also check ongoing floating volatility patterns of ON24 and AMERICAN.

Diversification Opportunities for ON24 and AMERICAN

0.15

Correlation Coefficient

ON24  AMERICAN

Average diversification

The 3 months correlation between ON24 and AMERICAN is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding ON24 Inc and AMERICAN TOWER P in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AMERICAN TOWER P and ON24 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 ON24 Inc are associated (or correlated) with AMERICAN. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AMERICAN TOWER P has no effect on the direction of ON24 i.e., ON24 and AMERICAN go up and down completely randomly.

Pair Corralation between ON24 and AMERICAN

Given the investment horizon of 90 days ON24 Inc is expected to under-perform the AMERICAN. In addition to that, ON24 is 3.89 times more volatile than AMERICAN TOWER P. It trades about -0.09 of its total potential returns per unit of risk. AMERICAN TOWER P is currently generating about -0.15 per unit of volatility. If you would invest  9,943  in AMERICAN TOWER P on October 25, 2024 and sell it today you would lose (118.00) from holding AMERICAN TOWER P or give up 1.19% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	95.0%
Values	Daily Returns

ON24 Inc  vs.  AMERICAN TOWER P

ON24 Inc

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in ON24 Inc are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, ON24 is not utilizing all of its potentials. The recent stock price disturbance, may contribute to mid-run losses for the stockholders.

AMERICAN TOWER P

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days AMERICAN TOWER P has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, AMERICAN is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with ON24 and AMERICAN

The main advantage of trading using opposite ON24 and AMERICAN positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ON24 position performs unexpectedly, AMERICAN 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 will offset losses from the drop in AMERICAN's long position.

The idea behind ON24 Inc and AMERICAN TOWER P 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 Global Correlations module to find global opportunities by holding instruments from different markets.