Correlation Between Melar Acquisition and American Financial
Can any of the company-specific risk be diversified away by investing in both Melar Acquisition and American Financial 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 Melar Acquisition and American Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Melar Acquisition Corp and American Financial Group, you can compare the effects of market volatilities on Melar Acquisition and American Financial 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 Melar Acquisition with a short position of American Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Melar Acquisition and American Financial.
Diversification Opportunities for Melar Acquisition and American Financial
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Melar and American is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Melar Acquisition Corp and American Financial Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Financial and Melar Acquisition 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 Melar Acquisition Corp are associated (or correlated) with American Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American Financial has no effect on the direction of Melar Acquisition i.e., Melar Acquisition and American Financial go up and down completely randomly.
Pair Corralation between Melar Acquisition and American Financial
Given the investment horizon of 90 days Melar Acquisition is expected to generate 367.0 times less return on investment than American Financial. But when comparing it to its historical volatility, Melar Acquisition Corp is 7.69 times less risky than American Financial. It trades about 0.0 of its potential returns per unit of risk. American Financial Group is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 1,966 in American Financial Group on September 1, 2024 and sell it today you would earn a total of 13.00 from holding American Financial Group or generate 0.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Melar Acquisition Corp vs. American Financial Group
Performance |
| Timeline |
| Melar Acquisition Corp |
| American Financial |
Melar Acquisition and American Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Melar Acquisition and American Financial
The main advantage of trading using opposite Melar Acquisition and American Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Melar Acquisition position performs unexpectedly, American Financial 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 Financial will offset losses from the drop in American Financial's long position.| Melar Acquisition vs. Allient | Melar Acquisition vs. Zoom Video Communications | Melar Acquisition vs. Arrow Electronics | Melar Acquisition vs. Radcom |
| American Financial vs. American Financial Group | American Financial vs. American Financial Group | American Financial vs. American Financial Group | American Financial vs. Reinsurance Group of |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
Other Complementary Tools
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios |