Correlation Between European Equity and Ameritrans Capital
Can any of the company-specific risk be diversified away by investing in both European Equity and Ameritrans Capital 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 European Equity and Ameritrans Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between European Equity Closed and Ameritrans Capital Corp, you can compare the effects of market volatilities on European Equity and Ameritrans Capital 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 European Equity with a short position of Ameritrans Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of European Equity and Ameritrans Capital.
Diversification Opportunities for European Equity and Ameritrans Capital
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between European and Ameritrans is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding European Equity Closed and Ameritrans Capital Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ameritrans Capital Corp and European Equity 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 European Equity Closed are associated (or correlated) with Ameritrans Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ameritrans Capital Corp has no effect on the direction of European Equity i.e., European Equity and Ameritrans Capital go up and down completely randomly.
Pair Corralation between European Equity and Ameritrans Capital
If you would invest 814.00 in European Equity Closed on November 3, 2024 and sell it today you would earn a total of 56.00 from holding European Equity Closed or generate 6.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
European Equity Closed vs. Ameritrans Capital Corp
Performance |
| Timeline |
| European Equity Closed |
| Ameritrans Capital Corp |
European Equity and Ameritrans Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with European Equity and Ameritrans Capital
The main advantage of trading using opposite European Equity and Ameritrans Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if European Equity position performs unexpectedly, Ameritrans Capital 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 Ameritrans Capital will offset losses from the drop in Ameritrans Capital's long position.| European Equity vs. XAI Octagon Floating | European Equity vs. MFS Charter Income | European Equity vs. Nuveen New York | European Equity vs. Western Asset High |
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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 Stocks Directory module to find actively traded stocks across global markets.
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