Correlation Between All For and Major League
Can any of the company-specific risk be diversified away by investing in both All For and Major League 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 All For and Major League into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between All For One and Major League Football, you can compare the effects of market volatilities on All For and Major League 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 All For with a short position of Major League. Check out your portfolio center. Please also check ongoing floating volatility patterns of All For and Major League.
Diversification Opportunities for All For and Major League
1.0 | Correlation Coefficient |
No risk reduction
The 3 months correlation between All and Major is 1.0. Overlapping area represents the amount of risk that can be diversified away by holding All For One and Major League Football in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Major League Football and All For 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 All For One are associated (or correlated) with Major League. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Major League Football has no effect on the direction of All For i.e., All For and Major League go up and down completely randomly.
Pair Corralation between All For and Major League
Given the investment horizon of 90 days All For One is expected to generate 18.33 times more return on investment than Major League. However, All For is 18.33 times more volatile than Major League Football. It trades about 0.21 of its potential returns per unit of risk. Major League Football is currently generating about 0.02 per unit of risk. If you would invest 57.00 in All For One on August 30, 2024 and sell it today you would lose (56.99) from holding All For One or give up 99.98% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
All For One vs. Major League Football
Performance |
| Timeline |
| All For One |
| Major League Football |
All For and Major League Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with All For and Major League
The main advantage of trading using opposite All For and Major League positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if All For position performs unexpectedly, Major League 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 Major League will offset losses from the drop in Major League's long position.| All For vs. Warner Music Group | All For vs. Live Nation Entertainment | All For vs. Atlanta Braves Holdings, | All For vs. Warner Bros Discovery |
| Major League vs. Bank Rakyat | Major League vs. PT Bank Rakyat | Major League vs. Samsung Electronics Co | Major League vs. Bank Mandiri Persero |
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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