Correlation Between American Axle and Cineverse Corp
Can any of the company-specific risk be diversified away by investing in both American Axle and Cineverse Corp 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 Cineverse Corp 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 Cineverse Corp, you can compare the effects of market volatilities on American Axle and Cineverse Corp 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 Cineverse Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Axle and Cineverse Corp.
Diversification Opportunities for American Axle and Cineverse Corp
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between American and Cineverse is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding American Axle Manufacturing and Cineverse Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cineverse Corp 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 Cineverse Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cineverse Corp has no effect on the direction of American Axle i.e., American Axle and Cineverse Corp go up and down completely randomly.
Pair Corralation between American Axle and Cineverse Corp
Considering the 90-day investment horizon American Axle Manufacturing is expected to under-perform the Cineverse Corp. But the stock apears to be less risky and, when comparing its historical volatility, American Axle Manufacturing is 2.48 times less risky than Cineverse Corp. The stock trades about -0.03 of its potential returns per unit of risk. The Cineverse Corp is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest 97.00 in Cineverse Corp on September 1, 2024 and sell it today you would earn a total of 280.00 from holding Cineverse Corp or generate 288.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
American Axle Manufacturing vs. Cineverse Corp
Performance |
| Timeline |
| American Axle Manufa |
| Cineverse Corp |
American Axle and Cineverse Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Axle and Cineverse Corp
The main advantage of trading using opposite American Axle and Cineverse Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Axle position performs unexpectedly, Cineverse Corp 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 Cineverse Corp will offset losses from the drop in Cineverse Corp's long position.| American Axle vs. Ford Motor | American Axle vs. General Motors | American Axle vs. Goodyear Tire Rubber | American Axle vs. Li Auto |
| Cineverse Corp vs. Parker Hannifin | Cineverse Corp vs. ChampionX | Cineverse Corp vs. Chart Industries | Cineverse Corp vs. CECO Environmental Corp |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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