Correlation Between American Balanced and Shandong
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By analyzing existing cross correlation between American Balanced and Shandong Hi Speed RoadBridge, you can compare the effects of market volatilities on American Balanced and Shandong 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 Balanced with a short position of Shandong. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Balanced and Shandong.
Diversification Opportunities for American Balanced and Shandong
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between American and Shandong is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding American Balanced and Shandong Hi Speed RoadBridge in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shandong Hi Speed and American Balanced 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 Balanced are associated (or correlated) with Shandong. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shandong Hi Speed has no effect on the direction of American Balanced i.e., American Balanced and Shandong go up and down completely randomly.
Pair Corralation between American Balanced and Shandong
Assuming the 90 days horizon American Balanced is expected to generate 0.47 times more return on investment than Shandong. However, American Balanced is 2.12 times less risky than Shandong. It trades about 0.2 of its potential returns per unit of risk. Shandong Hi Speed RoadBridge is currently generating about -0.25 per unit of risk. If you would invest 3,457 in American Balanced on October 23, 2024 and sell it today you would earn a total of 77.00 from holding American Balanced or generate 2.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 90.48% |
| Values | Daily Returns |
American Balanced vs. Shandong Hi Speed RoadBridge
Performance |
| Timeline |
| American Balanced |
| Shandong Hi Speed |
American Balanced and Shandong Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Balanced and Shandong
The main advantage of trading using opposite American Balanced and Shandong positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Balanced position performs unexpectedly, Shandong 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 Shandong will offset losses from the drop in Shandong's long position.| American Balanced vs. Income Fund Of | American Balanced vs. Capital Income Builder | American Balanced vs. Capital World Growth | American Balanced vs. Growth Fund Of |
| Shandong vs. Chengdu Kanghua Biological | Shandong vs. Beijing Wantai Biological | Shandong vs. Suzhou Novoprotein Scientific | Shandong vs. Aluminum Corp of |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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