Correlation Between Fundamental Global and American International
Can any of the company-specific risk be diversified away by investing in both Fundamental Global 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 Fundamental Global and American International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fundamental Global and American International Group, you can compare the effects of market volatilities on Fundamental Global 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 Fundamental Global with a short position of American International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fundamental Global and American International.
Diversification Opportunities for Fundamental Global and American International
-0.05 | Correlation Coefficient |
Good diversification
The 3 months correlation between Fundamental and American is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding Fundamental Global and American International Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American International and Fundamental Global 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 Fundamental Global 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 Fundamental Global i.e., Fundamental Global and American International go up and down completely randomly.
Pair Corralation between Fundamental Global and American International
Considering the 90-day investment horizon Fundamental Global is expected to generate 13.86 times more return on investment than American International. However, Fundamental Global is 13.86 times more volatile than American International Group. It trades about 0.16 of its potential returns per unit of risk. American International Group is currently generating about -0.09 per unit of risk. If you would invest 2,333 in Fundamental Global on August 27, 2024 and sell it today you would earn a total of 769.00 from holding Fundamental Global or generate 32.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fundamental Global vs. American International Group
Performance |
| Timeline |
| Fundamental Global |
| American International |
Fundamental Global and American International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fundamental Global and American International
The main advantage of trading using opposite Fundamental Global and American International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fundamental Global 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.| Fundamental Global vs. International General Insurance | Fundamental Global vs. BB Seguridade Participacoes | Fundamental Global vs. Goosehead Insurance | Fundamental Global vs. Enstar Group Limited |
| American International vs. Axa Equitable Holdings | American International vs. Arch Capital Group | American International vs. Old Republic International | American International vs. Sun Life Financial |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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