Correlation Between American Acquisition and Atlantic Coastal
Can any of the company-specific risk be diversified away by investing in both American Acquisition and Atlantic Coastal 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 Acquisition and Atlantic Coastal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American Acquisition Opportunity and Atlantic Coastal Acquisition, you can compare the effects of market volatilities on American Acquisition and Atlantic Coastal 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 Acquisition with a short position of Atlantic Coastal. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Acquisition and Atlantic Coastal.
Diversification Opportunities for American Acquisition and Atlantic Coastal
0.12 | Correlation Coefficient |
Average diversification
The 3 months correlation between American and Atlantic is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding American Acquisition Opportuni and Atlantic Coastal Acquisition in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Atlantic Coastal Acq and American Acquisition 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 Acquisition Opportunity are associated (or correlated) with Atlantic Coastal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Atlantic Coastal Acq has no effect on the direction of American Acquisition i.e., American Acquisition and Atlantic Coastal go up and down completely randomly.
Pair Corralation between American Acquisition and Atlantic Coastal
If you would invest 3.67 in Atlantic Coastal Acquisition on August 29, 2024 and sell it today you would earn a total of 0.00 from holding Atlantic Coastal Acquisition or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
American Acquisition Opportuni vs. Atlantic Coastal Acquisition
Performance |
| Timeline |
| American Acquisition |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Atlantic Coastal Acq |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
American Acquisition and Atlantic Coastal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Acquisition and Atlantic Coastal
The main advantage of trading using opposite American Acquisition and Atlantic Coastal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Acquisition position performs unexpectedly, Atlantic Coastal 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 Atlantic Coastal will offset losses from the drop in Atlantic Coastal's long position.The idea behind American Acquisition Opportunity and Atlantic Coastal Acquisition 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.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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
Other Complementary Tools
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios |