Correlation Between AmeraMex International and Close Brothers
Can any of the company-specific risk be diversified away by investing in both AmeraMex International and Close Brothers 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 AmeraMex International and Close Brothers into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AmeraMex International and Close Brothers Group, you can compare the effects of market volatilities on AmeraMex International and Close Brothers 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 AmeraMex International with a short position of Close Brothers. Check out your portfolio center. Please also check ongoing floating volatility patterns of AmeraMex International and Close Brothers.
Diversification Opportunities for AmeraMex International and Close Brothers
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between AmeraMex and Close is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding AmeraMex International and Close Brothers Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Close Brothers Group and AmeraMex 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 AmeraMex International are associated (or correlated) with Close Brothers. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Close Brothers Group has no effect on the direction of AmeraMex International i.e., AmeraMex International and Close Brothers go up and down completely randomly.
Pair Corralation between AmeraMex International and Close Brothers
Given the investment horizon of 90 days AmeraMex International is expected to generate 2.85 times more return on investment than Close Brothers. However, AmeraMex International is 2.85 times more volatile than Close Brothers Group. It trades about 0.04 of its potential returns per unit of risk. Close Brothers Group is currently generating about -0.08 per unit of risk. If you would invest 26.00 in AmeraMex International on September 12, 2024 and sell it today you would lose (4.00) from holding AmeraMex International or give up 15.38% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.17% |
| Values | Daily Returns |
AmeraMex International vs. Close Brothers Group
Performance |
| Timeline |
| AmeraMex International |
| Close Brothers Group |
AmeraMex International and Close Brothers Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AmeraMex International and Close Brothers
The main advantage of trading using opposite AmeraMex International and Close Brothers positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AmeraMex International position performs unexpectedly, Close Brothers 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 Close Brothers will offset losses from the drop in Close Brothers' long position.| AmeraMex International vs. Komatsu | AmeraMex International vs. Alamo Group | AmeraMex International vs. Hitachi Construction Machinery | AmeraMex International vs. Komatsu |
| Close Brothers vs. Peoples Bancorp | Close Brothers vs. Primis Financial Corp | Close Brothers vs. ConnectOne Bancorp | Close Brothers vs. LINKBANCORP |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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