Correlation Between American Security and Eco Wave
Can any of the company-specific risk be diversified away by investing in both American Security and Eco Wave 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 Security and Eco Wave into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American Security Resources and Eco Wave Power, you can compare the effects of market volatilities on American Security and Eco Wave 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 Security with a short position of Eco Wave. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Security and Eco Wave.
Diversification Opportunities for American Security and Eco Wave
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between American and Eco is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding American Security Resources and Eco Wave Power in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eco Wave Power and American Security 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 Security Resources are associated (or correlated) with Eco Wave. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eco Wave Power has no effect on the direction of American Security i.e., American Security and Eco Wave go up and down completely randomly.
Pair Corralation between American Security and Eco Wave
Given the investment horizon of 90 days American Security Resources is expected to generate 3.42 times more return on investment than Eco Wave. However, American Security is 3.42 times more volatile than Eco Wave Power. It trades about 0.09 of its potential returns per unit of risk. Eco Wave Power is currently generating about -0.14 per unit of risk. If you would invest 0.01 in American Security Resources on October 20, 2024 and sell it today you would earn a total of 0.00 from holding American Security Resources or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 90.91% |
| Values | Daily Returns |
American Security Resources vs. Eco Wave Power
Performance |
| Timeline |
| American Security |
| Eco Wave Power |
American Security and Eco Wave Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Security and Eco Wave
The main advantage of trading using opposite American Security and Eco Wave positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Security position performs unexpectedly, Eco Wave 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 Eco Wave will offset losses from the drop in Eco Wave's long position.| American Security vs. Astra Energy | American Security vs. Alternus Energy Group | American Security vs. Carnegie Clean Energy | American Security vs. Triad Pro Innovators |
| Eco Wave vs. Alternus Energy Group | Eco Wave vs. Triad Pro Innovators | Eco Wave vs. American Security Resources | Eco Wave vs. Verde Clean Fuels |
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 Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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