Correlation Between AMA Group and American Axle
Can any of the company-specific risk be diversified away by investing in both AMA Group and American Axle 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 AMA Group and American Axle into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AMA Group Limited and American Axle Manufacturing, you can compare the effects of market volatilities on AMA Group and American Axle 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 AMA Group with a short position of American Axle. Check out your portfolio center. Please also check ongoing floating volatility patterns of AMA Group and American Axle.
Diversification Opportunities for AMA Group and American Axle
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between AMA and American is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding AMA Group Limited and American Axle Manufacturing in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Axle Manufa and AMA Group 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 AMA Group Limited are associated (or correlated) with American Axle. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American Axle Manufa has no effect on the direction of AMA Group i.e., AMA Group and American Axle go up and down completely randomly.
Pair Corralation between AMA Group and American Axle
Assuming the 90 days horizon AMA Group Limited is expected to generate 20.77 times more return on investment than American Axle. However, AMA Group is 20.77 times more volatile than American Axle Manufacturing. It trades about 0.07 of its potential returns per unit of risk. American Axle Manufacturing is currently generating about 0.0 per unit of risk. If you would invest 15.00 in AMA Group Limited on September 12, 2024 and sell it today you would lose (10.25) from holding AMA Group Limited or give up 68.33% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.6% |
| Values | Daily Returns |
AMA Group Limited vs. American Axle Manufacturing
Performance |
| Timeline |
| AMA Group Limited |
| American Axle Manufa |
AMA Group and American Axle Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AMA Group and American Axle
The main advantage of trading using opposite AMA Group and American Axle positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AMA Group position performs unexpectedly, American Axle 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 American Axle will offset losses from the drop in American Axle's long position.| AMA Group vs. Adient PLC | AMA Group vs. Lear Corporation | AMA Group vs. Autoliv | AMA Group vs. American Axle Manufacturing |
| American Axle vs. Cooper Stnd | American Axle vs. Motorcar Parts of | American Axle vs. Stoneridge | American Axle vs. Dorman Products |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
Other Complementary Tools
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format |