Correlation Between American Superconductor and NGK Insulators
Can any of the company-specific risk be diversified away by investing in both American Superconductor and NGK Insulators 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 Superconductor and NGK Insulators into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American Superconductor and NGK Insulators, you can compare the effects of market volatilities on American Superconductor and NGK Insulators 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 Superconductor with a short position of NGK Insulators. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Superconductor and NGK Insulators.
Diversification Opportunities for American Superconductor and NGK Insulators
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between American and NGK is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding American Superconductor and NGK Insulators in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NGK Insulators and American Superconductor 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 Superconductor are associated (or correlated) with NGK Insulators. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NGK Insulators has no effect on the direction of American Superconductor i.e., American Superconductor and NGK Insulators go up and down completely randomly.
Pair Corralation between American Superconductor and NGK Insulators
Given the investment horizon of 90 days American Superconductor is expected to generate 2.05 times more return on investment than NGK Insulators. However, American Superconductor is 2.05 times more volatile than NGK Insulators. It trades about 0.1 of its potential returns per unit of risk. NGK Insulators is currently generating about 0.02 per unit of risk. If you would invest 335.00 in American Superconductor on September 14, 2024 and sell it today you would earn a total of 2,248 from holding American Superconductor or generate 670.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 72.32% |
| Values | Daily Returns |
American Superconductor vs. NGK Insulators
Performance |
| Timeline |
| American Superconductor |
| NGK Insulators |
American Superconductor and NGK Insulators Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Superconductor and NGK Insulators
The main advantage of trading using opposite American Superconductor and NGK Insulators positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Superconductor position performs unexpectedly, NGK Insulators 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 NGK Insulators will offset losses from the drop in NGK Insulators' long position.| American Superconductor vs. Barnes Group | American Superconductor vs. Babcock Wilcox Enterprises | American Superconductor vs. Crane Company | American Superconductor vs. Hillenbrand |
| NGK Insulators vs. CECO Environmental Corp | NGK Insulators vs. Akanda Corp | NGK Insulators vs. Newpark Resources | NGK Insulators vs. Everus Construction Group |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
Other Complementary Tools
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. |