Correlation Between American International and Bright Horizons
Can any of the company-specific risk be diversified away by investing in both American International and Bright Horizons 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 International and Bright Horizons into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American International Holdings and Bright Horizons Family, you can compare the effects of market volatilities on American International and Bright Horizons 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 International with a short position of Bright Horizons. Check out your portfolio center. Please also check ongoing floating volatility patterns of American International and Bright Horizons.
Diversification Opportunities for American International and Bright Horizons
-0.29 | Correlation Coefficient |
Very good diversification
The 3 months correlation between American and Bright is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding American International Holding and Bright Horizons Family in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bright Horizons Family and American International 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 International Holdings are associated (or correlated) with Bright Horizons. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bright Horizons Family has no effect on the direction of American International i.e., American International and Bright Horizons go up and down completely randomly.
Pair Corralation between American International and Bright Horizons
Given the investment horizon of 90 days American International Holdings is expected to generate 67.34 times more return on investment than Bright Horizons. However, American International is 67.34 times more volatile than Bright Horizons Family. It trades about 0.19 of its potential returns per unit of risk. Bright Horizons Family is currently generating about -0.18 per unit of risk. If you would invest 0.01 in American International Holdings on August 25, 2024 and sell it today you would earn a total of 0.00 from holding American International Holdings or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
American International Holding vs. Bright Horizons Family
Performance |
| Timeline |
| American International |
| Bright Horizons Family |
American International and Bright Horizons Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American International and Bright Horizons
The main advantage of trading using opposite American International and Bright Horizons positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American International position performs unexpectedly, Bright Horizons 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 Bright Horizons will offset losses from the drop in Bright Horizons' long position.| American International vs. Goodfood Market Corp | American International vs. GD Entertainment Technology | American International vs. Mister Car Wash | American International vs. Bright Horizons Family |
| Bright Horizons vs. Frontdoor | Bright Horizons vs. Smart Share Global | Bright Horizons vs. Mister Car Wash | Bright Horizons vs. Carriage Services |
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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
Other Complementary Tools
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data |