Correlation Between DTE Energy and American International
Can any of the company-specific risk be diversified away by investing in both DTE Energy and American International 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 DTE Energy and American International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between DTE Energy and American International Holdings, you can compare the effects of market volatilities on DTE Energy and American International 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 DTE Energy with a short position of American International. Check out your portfolio center. Please also check ongoing floating volatility patterns of DTE Energy and American International.
Diversification Opportunities for DTE Energy and American International
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between DTE and American is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding DTE Energy and American International Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American International and DTE Energy 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 DTE Energy are associated (or correlated) with American International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American International has no effect on the direction of DTE Energy i.e., DTE Energy and American International go up and down completely randomly.
Pair Corralation between DTE Energy and American International
Considering the 90-day investment horizon DTE Energy is expected to under-perform the American International. But the stock apears to be less risky and, when comparing its historical volatility, DTE Energy is 232.88 times less risky than American International. The stock trades about -0.2 of its potential returns per unit of risk. The American International Holdings is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest 0.01 in American International Holdings on September 1, 2024 and sell it today you would earn a total of 0.00 from holding American International Holdings or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
DTE Energy vs. American International Holding
Performance |
| Timeline |
| DTE Energy |
| American International |
DTE Energy and American International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with DTE Energy and American International
The main advantage of trading using opposite DTE Energy and American International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DTE Energy position performs unexpectedly, American International 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 American International will offset losses from the drop in American International's long position.| DTE Energy vs. Kanzhun Ltd ADR | DTE Energy vs. Sonic Automotive | DTE Energy vs. Avis Budget Group | DTE Energy vs. DTE Energy |
| American International vs. Goodfood Market Corp | American International vs. GD Entertainment Technology | American International vs. Mister Car Wash | American International vs. Bright Horizons Family |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
Other Complementary Tools
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. |