Correlation Between Evertz Technologies and American Axle
Can any of the company-specific risk be diversified away by investing in both Evertz Technologies and American Axle 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 Evertz Technologies and American Axle into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Evertz Technologies Limited and American Axle Manufacturing, you can compare the effects of market volatilities on Evertz Technologies and American Axle 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 Evertz Technologies with a short position of American Axle. Check out your portfolio center. Please also check ongoing floating volatility patterns of Evertz Technologies and American Axle.
Diversification Opportunities for Evertz Technologies and American Axle
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Evertz and American is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Evertz Technologies Limited and American Axle Manufacturing in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Axle Manufa and Evertz Technologies 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 Evertz Technologies Limited are associated (or correlated) with American Axle. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American Axle Manufa has no effect on the direction of Evertz Technologies i.e., Evertz Technologies and American Axle go up and down completely randomly.
Pair Corralation between Evertz Technologies and American Axle
Assuming the 90 days horizon Evertz Technologies Limited is expected to under-perform the American Axle. But the pink sheet apears to be less risky and, when comparing its historical volatility, Evertz Technologies Limited is 1.01 times less risky than American Axle. The pink sheet trades about -0.02 of its potential returns per unit of risk. The American Axle Manufacturing is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 720.00 in American Axle Manufacturing on September 14, 2024 and sell it today you would lose (59.00) from holding American Axle Manufacturing or give up 8.19% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 77.32% |
| Values | Daily Returns |
Evertz Technologies Limited vs. American Axle Manufacturing
Performance |
| Timeline |
| Evertz Technologies |
| American Axle Manufa |
Evertz Technologies and American Axle Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Evertz Technologies and American Axle
The main advantage of trading using opposite Evertz Technologies and American Axle positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Evertz Technologies position performs unexpectedly, American Axle 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 Axle will offset losses from the drop in American Axle's long position.| Evertz Technologies vs. Deere Company | Evertz Technologies vs. Caterpillar | Evertz Technologies vs. Lion Electric Corp | Evertz Technologies vs. Nikola Corp |
| American Axle vs. Ford Motor | American Axle vs. General Motors | American Axle vs. Goodyear Tire Rubber | American Axle vs. Li Auto |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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