Correlation Between American Premium and Palfinger
Can any of the company-specific risk be diversified away by investing in both American Premium and Palfinger 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 American Premium and Palfinger into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American Premium Water and Palfinger AG, you can compare the effects of market volatilities on American Premium and Palfinger 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 American Premium with a short position of Palfinger. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Premium and Palfinger.
Diversification Opportunities for American Premium and Palfinger
0.09 | Correlation Coefficient |
Significant diversification
The 3 months correlation between American and Palfinger is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding American Premium Water and Palfinger AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Palfinger AG and American Premium 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 American Premium Water are associated (or correlated) with Palfinger. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Palfinger AG has no effect on the direction of American Premium i.e., American Premium and Palfinger go up and down completely randomly.
Pair Corralation between American Premium and Palfinger
If you would invest 2,150 in Palfinger AG on November 28, 2024 and sell it today you would earn a total of 0.00 from holding Palfinger AG or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
American Premium Water vs. Palfinger AG
Performance |
| Timeline |
| American Premium Water |
| Palfinger AG |
American Premium and Palfinger Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Premium and Palfinger
The main advantage of trading using opposite American Premium and Palfinger positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Premium position performs unexpectedly, Palfinger 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 Palfinger will offset losses from the drop in Palfinger's long position.| American Premium vs. First Tractor | American Premium vs. Ag Growth International | American Premium vs. AmeraMex International | American Premium vs. Arts Way Manufacturing Co |
| Palfinger vs. Anterix | Palfinger vs. Axcelis Technologies | Palfinger vs. National CineMedia | Palfinger vs. Imax Corp |
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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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