Correlation Between American Financial and TV Asahi
Can any of the company-specific risk be diversified away by investing in both American Financial and TV Asahi 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 Financial and TV Asahi into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American Financial Group and TV Asahi Holdings, you can compare the effects of market volatilities on American Financial and TV Asahi 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 Financial with a short position of TV Asahi. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Financial and TV Asahi.
Diversification Opportunities for American Financial and TV Asahi
-0.68 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between American and THDDY is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding American Financial Group and TV Asahi Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TV Asahi Holdings and American Financial 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 Financial Group are associated (or correlated) with TV Asahi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TV Asahi Holdings has no effect on the direction of American Financial i.e., American Financial and TV Asahi go up and down completely randomly.
Pair Corralation between American Financial and TV Asahi
Considering the 90-day investment horizon American Financial Group is expected to generate 0.55 times more return on investment than TV Asahi. However, American Financial Group is 1.81 times less risky than TV Asahi. It trades about 0.1 of its potential returns per unit of risk. TV Asahi Holdings is currently generating about 0.04 per unit of risk. If you would invest 10,143 in American Financial Group on September 14, 2024 and sell it today you would earn a total of 3,848 from holding American Financial Group or generate 37.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
American Financial Group vs. TV Asahi Holdings
Performance |
| Timeline |
| American Financial |
| TV Asahi Holdings |
American Financial and TV Asahi Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Financial and TV Asahi
The main advantage of trading using opposite American Financial and TV Asahi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Financial position performs unexpectedly, TV Asahi 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 TV Asahi will offset losses from the drop in TV Asahi's long position.| American Financial vs. Selective Insurance Group | American Financial vs. Horace Mann Educators | American Financial vs. Kemper | American Financial vs. ProAssurance |
| TV Asahi vs. ProSiebenSat1 Media AG | TV Asahi vs. RTL Group SA | TV Asahi vs. iHeartMedia | TV Asahi vs. TV Azteca SAB |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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