Correlation Between American National and American National
Can any of the company-specific risk be diversified away by investing in both American National and American National 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 National and American National into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American National Group and American National Group, you can compare the effects of market volatilities on American National and American National 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 National with a short position of American National. Check out your portfolio center. Please also check ongoing floating volatility patterns of American National and American National.
Diversification Opportunities for American National and American National
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between American and American is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding American National Group and American National Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American National and American National 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 National Group are associated (or correlated) with American National. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American National has no effect on the direction of American National i.e., American National and American National go up and down completely randomly.
Pair Corralation between American National and American National
Assuming the 90 days trading horizon American National Group is expected to generate 1.13 times more return on investment than American National. However, American National is 1.13 times more volatile than American National Group. It trades about 0.07 of its potential returns per unit of risk. American National Group is currently generating about 0.05 per unit of risk. If you would invest 2,060 in American National Group on August 31, 2024 and sell it today you would earn a total of 455.00 from holding American National Group or generate 22.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
American National Group vs. American National Group
Performance |
| Timeline |
| American National |
| American National |
American National and American National Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American National and American National
The main advantage of trading using opposite American National and American National positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American National position performs unexpectedly, American National 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 National will offset losses from the drop in American National's long position.| American National vs. Afya | American National vs. Nexstar Broadcasting Group | American National vs. Ihuman Inc | American National vs. Hafnia Limited |
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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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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