Correlation Between Acushnet Holdings and American Outdoor
Can any of the company-specific risk be diversified away by investing in both Acushnet Holdings and American Outdoor 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 Acushnet Holdings and American Outdoor into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Acushnet Holdings Corp and American Outdoor Brands, you can compare the effects of market volatilities on Acushnet Holdings and American Outdoor 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 Acushnet Holdings with a short position of American Outdoor. Check out your portfolio center. Please also check ongoing floating volatility patterns of Acushnet Holdings and American Outdoor.
Diversification Opportunities for Acushnet Holdings and American Outdoor
0.18 | Correlation Coefficient |
Average diversification
The 3 months correlation between Acushnet and American is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Acushnet Holdings Corp and American Outdoor Brands in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Outdoor Brands and Acushnet Holdings 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 Acushnet Holdings Corp are associated (or correlated) with American Outdoor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American Outdoor Brands has no effect on the direction of Acushnet Holdings i.e., Acushnet Holdings and American Outdoor go up and down completely randomly.
Pair Corralation between Acushnet Holdings and American Outdoor
Given the investment horizon of 90 days Acushnet Holdings Corp is expected to generate 1.11 times more return on investment than American Outdoor. However, Acushnet Holdings is 1.11 times more volatile than American Outdoor Brands. It trades about 0.35 of its potential returns per unit of risk. American Outdoor Brands is currently generating about 0.06 per unit of risk. If you would invest 6,026 in Acushnet Holdings Corp on August 28, 2024 and sell it today you would earn a total of 1,395 from holding Acushnet Holdings Corp or generate 23.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Acushnet Holdings Corp vs. American Outdoor Brands
Performance |
| Timeline |
| Acushnet Holdings Corp |
| American Outdoor Brands |
Acushnet Holdings and American Outdoor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Acushnet Holdings and American Outdoor
The main advantage of trading using opposite Acushnet Holdings and American Outdoor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Acushnet Holdings position performs unexpectedly, American Outdoor 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 Outdoor will offset losses from the drop in American Outdoor's long position.| Acushnet Holdings vs. MCBC Holdings | Acushnet Holdings vs. Winnebago Industries | Acushnet Holdings vs. LCI Industries | Acushnet Holdings vs. Thor Industries |
| American Outdoor vs. Clarus Corp | American Outdoor vs. Escalade Incorporated | American Outdoor vs. Johnson Outdoors | American Outdoor vs. JAKKS Pacific |
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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