Correlation Between Aston Martin and American Funds
Can any of the company-specific risk be diversified away by investing in both Aston Martin and American Funds 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 Aston Martin and American Funds into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aston Martin Lagonda and American Funds 2040, you can compare the effects of market volatilities on Aston Martin and American Funds 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 Aston Martin with a short position of American Funds. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aston Martin and American Funds.
Diversification Opportunities for Aston Martin and American Funds
0.14 | Correlation Coefficient |
Average diversification
The 3 months correlation between Aston and American is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Aston Martin Lagonda and American Funds 2040 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Funds 2040 and Aston Martin 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 Aston Martin Lagonda are associated (or correlated) with American Funds. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American Funds 2040 has no effect on the direction of Aston Martin i.e., Aston Martin and American Funds go up and down completely randomly.
Pair Corralation between Aston Martin and American Funds
Assuming the 90 days horizon Aston Martin Lagonda is expected to under-perform the American Funds. In addition to that, Aston Martin is 2.05 times more volatile than American Funds 2040. It trades about -0.11 of its total potential returns per unit of risk. American Funds 2040 is currently generating about -0.23 per unit of volatility. If you would invest 2,172 in American Funds 2040 on October 9, 2024 and sell it today you would lose (103.00) from holding American Funds 2040 or give up 4.74% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aston Martin Lagonda vs. American Funds 2040
Performance |
| Timeline |
| Aston Martin Lagonda |
| American Funds 2040 |
Aston Martin and American Funds Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aston Martin and American Funds
The main advantage of trading using opposite Aston Martin and American Funds positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aston Martin position performs unexpectedly, American Funds 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 Funds will offset losses from the drop in American Funds' long position.| Aston Martin vs. Geely Automobile Holdings | Aston Martin vs. Guangzhou Automobile Group | Aston Martin vs. Dowlais Group plc | Aston Martin vs. NFI Group |
| American Funds vs. Gamco Global Gold | American Funds vs. Short Precious Metals | American Funds vs. Gabelli Gold Fund | American Funds vs. Goldman Sachs Short |
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 CEOs Directory module to screen CEOs from public companies around the world.
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