Correlation Between American Axle and 40414LAM1
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By analyzing existing cross correlation between American Axle Manufacturing and HCP INC 34, you can compare the effects of market volatilities on American Axle and 40414LAM1 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 40414LAM1. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Axle and 40414LAM1.
Diversification Opportunities for American Axle and 40414LAM1
-0.27 | Correlation Coefficient |
Very good diversification
The 3 months correlation between American and 40414LAM1 is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding American Axle Manufacturing and HCP INC 34 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HCP INC 34 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 40414LAM1. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HCP INC 34 has no effect on the direction of American Axle i.e., American Axle and 40414LAM1 go up and down completely randomly.
Pair Corralation between American Axle and 40414LAM1
Considering the 90-day investment horizon American Axle Manufacturing is expected to generate 7.54 times more return on investment than 40414LAM1. However, American Axle is 7.54 times more volatile than HCP INC 34. It trades about 0.0 of its potential returns per unit of risk. HCP INC 34 is currently generating about 0.01 per unit of risk. If you would invest 767.00 in American Axle Manufacturing on September 12, 2024 and sell it today you would lose (85.00) from holding American Axle Manufacturing or give up 11.08% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 83.23% |
| Values | Daily Returns |
American Axle Manufacturing vs. HCP INC 34
Performance |
| Timeline |
| American Axle Manufa |
| HCP INC 34 |
American Axle and 40414LAM1 Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Axle and 40414LAM1
The main advantage of trading using opposite American Axle and 40414LAM1 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Axle position performs unexpectedly, 40414LAM1 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 40414LAM1 will offset losses from the drop in 40414LAM1's long position.| American Axle vs. Cooper Stnd | American Axle vs. Motorcar Parts of | American Axle vs. Stoneridge | American Axle vs. Dorman Products |
| 40414LAM1 vs. PACCAR Inc | 40414LAM1 vs. U Power Limited | 40414LAM1 vs. SEI Investments | 40414LAM1 vs. American Axle Manufacturing |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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