Correlation Between America Great and Linamar
Can any of the company-specific risk be diversified away by investing in both America Great and Linamar 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 America Great and Linamar into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between America Great Health and Linamar, you can compare the effects of market volatilities on America Great and Linamar 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 America Great with a short position of Linamar. Check out your portfolio center. Please also check ongoing floating volatility patterns of America Great and Linamar.
Diversification Opportunities for America Great and Linamar
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between America and Linamar is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding America Great Health and Linamar in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Linamar and America Great 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 America Great Health are associated (or correlated) with Linamar. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Linamar has no effect on the direction of America Great i.e., America Great and Linamar go up and down completely randomly.
Pair Corralation between America Great and Linamar
If you would invest 4,424 in Linamar on August 28, 2024 and sell it today you would earn a total of 123.00 from holding Linamar or generate 2.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
America Great Health vs. Linamar
Performance |
| Timeline |
| America Great Health |
| Linamar |
America Great and Linamar Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with America Great and Linamar
The main advantage of trading using opposite America Great and Linamar positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if America Great position performs unexpectedly, Linamar 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 Linamar will offset losses from the drop in Linamar's long position.The idea behind America Great Health and Linamar 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.| Linamar vs. FitLife Brands, Common | Linamar vs. HUMANA INC | Linamar vs. SCOR PK | Linamar vs. Aquagold International |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
Other Complementary Tools
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
| Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Global Correlations Find global opportunities by holding instruments from different markets | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. |