Correlation Between American Axle and Savers Value
Can any of the company-specific risk be diversified away by investing in both American Axle and Savers Value 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 Savers Value 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 Savers Value Village,, you can compare the effects of market volatilities on American Axle and Savers Value 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 Savers Value. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Axle and Savers Value.
Diversification Opportunities for American Axle and Savers Value
-0.02 | Correlation Coefficient |
Good diversification
The 3 months correlation between American and Savers is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding American Axle Manufacturing and Savers Value Village, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Savers Value Village, 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 Savers Value. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Savers Value Village, has no effect on the direction of American Axle i.e., American Axle and Savers Value go up and down completely randomly.
Pair Corralation between American Axle and Savers Value
Considering the 90-day investment horizon American Axle Manufacturing is expected to generate 0.82 times more return on investment than Savers Value. However, American Axle Manufacturing is 1.23 times less risky than Savers Value. It trades about 0.05 of its potential returns per unit of risk. Savers Value Village, is currently generating about 0.03 per unit of risk. If you would invest 622.00 in American Axle Manufacturing on September 2, 2024 and sell it today you would earn a total of 39.00 from holding American Axle Manufacturing or generate 6.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
American Axle Manufacturing vs. Savers Value Village,
Performance |
| Timeline |
| American Axle Manufa |
| Savers Value Village, |
American Axle and Savers Value Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Axle and Savers Value
The main advantage of trading using opposite American Axle and Savers Value positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Axle position performs unexpectedly, Savers Value 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 Savers Value will offset losses from the drop in Savers Value's long position.| American Axle vs. Ford Motor | American Axle vs. General Motors | American Axle vs. Goodyear Tire Rubber | American Axle vs. Li Auto |
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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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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