Correlation Between American Axle and Capital Clean
Can any of the company-specific risk be diversified away by investing in both American Axle and Capital Clean 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 Axle and Capital Clean into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American Axle Manufacturing and Capital Clean Energy, you can compare the effects of market volatilities on American Axle and Capital Clean 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 Axle with a short position of Capital Clean. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Axle and Capital Clean.
Diversification Opportunities for American Axle and Capital Clean
0.19 | Correlation Coefficient |
Average diversification
The 3 months correlation between American and Capital is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding American Axle Manufacturing and Capital Clean Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Capital Clean Energy and American Axle 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 Axle Manufacturing are associated (or correlated) with Capital Clean. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Capital Clean Energy has no effect on the direction of American Axle i.e., American Axle and Capital Clean go up and down completely randomly.
Pair Corralation between American Axle and Capital Clean
Considering the 90-day investment horizon American Axle Manufacturing is expected to generate 2.09 times more return on investment than Capital Clean. However, American Axle is 2.09 times more volatile than Capital Clean Energy. It trades about 0.23 of its potential returns per unit of risk. Capital Clean Energy is currently generating about -0.02 per unit of risk. If you would invest 580.00 in American Axle Manufacturing on September 3, 2024 and sell it today you would earn a total of 81.00 from holding American Axle Manufacturing or generate 13.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
American Axle Manufacturing vs. Capital Clean Energy
Performance |
| Timeline |
| American Axle Manufa |
| Capital Clean Energy |
American Axle and Capital Clean Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Axle and Capital Clean
The main advantage of trading using opposite American Axle and Capital Clean positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Axle position performs unexpectedly, Capital Clean 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 Capital Clean will offset losses from the drop in Capital Clean's long position.| American Axle vs. Allison Transmission Holdings | American Axle vs. Aptiv PLC | American Axle vs. LKQ Corporation | American Axle vs. Lear Corporation |
| Capital Clean vs. Electrovaya Common Shares | Capital Clean vs. Zoom Video Communications | Capital Clean vs. Videolocity International | Capital Clean vs. Hurco Companies |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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