Correlation Between American Balanced and Trump Media
Can any of the company-specific risk be diversified away by investing in both American Balanced 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 Balanced 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 Balanced and Trump Media Technology, you can compare the effects of market volatilities on American Balanced 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 Balanced with a short position of Trump Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Balanced and Trump Media.
Diversification Opportunities for American Balanced and Trump Media
-0.28 | Correlation Coefficient |
Very good diversification
The 3 months correlation between American and Trump is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding American Balanced 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 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 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 Balanced i.e., American Balanced and Trump Media go up and down completely randomly.
Pair Corralation between American Balanced and Trump Media
Assuming the 90 days horizon American Balanced is expected to generate 0.09 times more return on investment than Trump Media. However, American Balanced is 10.9 times less risky than Trump Media. It trades about 0.21 of its potential returns per unit of risk. Trump Media Technology is currently generating about -0.02 per unit of risk. If you would invest 3,439 in American Balanced on November 3, 2024 and sell it today you would earn a total of 94.00 from holding American Balanced or generate 2.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
American Balanced vs. Trump Media Technology
Performance |
| Timeline |
| American Balanced |
| Trump Media Technology |
American Balanced and Trump Media Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Balanced and Trump Media
The main advantage of trading using opposite American Balanced and Trump Media positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Balanced 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.| American Balanced vs. Income Fund Of | American Balanced vs. Capital Income Builder | American Balanced vs. Capital World Growth | American Balanced vs. Growth Fund Of |
| Trump Media vs. Biglari Holdings | Trump Media vs. DHI Group | Trump Media vs. Golden Energy Offshore | Trump Media vs. One Group Hospitality |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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