Correlation Between American Superconductor and Weir Group
Can any of the company-specific risk be diversified away by investing in both American Superconductor and Weir Group 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 Weir Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American Superconductor and The Weir Group, you can compare the effects of market volatilities on American Superconductor and Weir Group 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 Weir Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Superconductor and Weir Group.
Diversification Opportunities for American Superconductor and Weir Group
-0.11 | Correlation Coefficient |
Good diversification
The 3 months correlation between American and Weir is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding American Superconductor and The Weir Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Weir Group 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 Weir Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Weir Group has no effect on the direction of American Superconductor i.e., American Superconductor and Weir Group go up and down completely randomly.
Pair Corralation between American Superconductor and Weir Group
Given the investment horizon of 90 days American Superconductor is expected to generate 3.16 times more return on investment than Weir Group. However, American Superconductor is 3.16 times more volatile than The Weir Group. It trades about 0.1 of its potential returns per unit of risk. The Weir Group is currently generating about 0.04 per unit of risk. If you would invest 364.00 in American Superconductor on September 5, 2024 and sell it today you would earn a total of 2,920 from holding American Superconductor or generate 802.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 71.52% |
| Values | Daily Returns |
American Superconductor vs. The Weir Group
Performance |
| Timeline |
| American Superconductor |
| Weir Group |
American Superconductor and Weir Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Superconductor and Weir Group
The main advantage of trading using opposite American Superconductor and Weir Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Superconductor position performs unexpectedly, Weir Group 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 Weir Group will offset losses from the drop in Weir Group's long position.| American Superconductor vs. Nel ASA | American Superconductor vs. Graham | American Superconductor vs. Watts Water Technologies | American Superconductor vs. CVD Equipment |
| Weir Group vs. Shanghai Electric Group | Weir Group vs. Xinjiang Goldwind Science | Weir Group vs. American Superconductor | Weir Group vs. Cummins |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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