Correlation Between American Axle and Monro Muffler
Can any of the company-specific risk be diversified away by investing in both American Axle and Monro Muffler 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 Monro Muffler 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 Monro Muffler Brake, you can compare the effects of market volatilities on American Axle and Monro Muffler 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 Monro Muffler. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Axle and Monro Muffler.
Diversification Opportunities for American Axle and Monro Muffler
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between American and Monro is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding American Axle Manufacturing and Monro Muffler Brake in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Monro Muffler Brake 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 Monro Muffler. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Monro Muffler Brake has no effect on the direction of American Axle i.e., American Axle and Monro Muffler go up and down completely randomly.
Pair Corralation between American Axle and Monro Muffler
Considering the 90-day investment horizon American Axle Manufacturing is expected to generate 1.47 times more return on investment than Monro Muffler. However, American Axle is 1.47 times more volatile than Monro Muffler Brake. It trades about 0.09 of its potential returns per unit of risk. Monro Muffler Brake is currently generating about -0.03 per unit of risk. If you would invest 604.00 in American Axle Manufacturing on August 24, 2024 and sell it today you would earn a total of 34.00 from holding American Axle Manufacturing or generate 5.63% 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. Monro Muffler Brake
Performance |
| Timeline |
| American Axle Manufa |
| Monro Muffler Brake |
American Axle and Monro Muffler Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Axle and Monro Muffler
The main advantage of trading using opposite American Axle and Monro Muffler positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Axle position performs unexpectedly, Monro Muffler 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 Monro Muffler will offset losses from the drop in Monro Muffler's long position.| American Axle vs. Gentex | American Axle vs. Adient PLC | American Axle vs. Autoliv | American Axle vs. Fox Factory Holding |
| Monro Muffler vs. Motorcar Parts of | Monro Muffler vs. Standard Motor Products | Monro Muffler vs. Stoneridge | Monro Muffler vs. Douglas Dynamics |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
Other Complementary Tools
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. |