Correlation Between American Environmental and Bowhead Specialty
Can any of the company-specific risk be diversified away by investing in both American Environmental and Bowhead Specialty 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 Environmental and Bowhead Specialty into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American Environmental and Bowhead Specialty Holdings, you can compare the effects of market volatilities on American Environmental and Bowhead Specialty 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 Environmental with a short position of Bowhead Specialty. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Environmental and Bowhead Specialty.
Diversification Opportunities for American Environmental and Bowhead Specialty
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between American and Bowhead is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding American Environmental and Bowhead Specialty Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bowhead Specialty and American Environmental 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 Environmental are associated (or correlated) with Bowhead Specialty. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bowhead Specialty has no effect on the direction of American Environmental i.e., American Environmental and Bowhead Specialty go up and down completely randomly.
Pair Corralation between American Environmental and Bowhead Specialty
If you would invest 0.01 in American Environmental on November 1, 2024 and sell it today you would earn a total of 0.00 from holding American Environmental or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 95.0% |
| Values | Daily Returns |
American Environmental vs. Bowhead Specialty Holdings
Performance |
| Timeline |
| American Environmental |
| Bowhead Specialty |
American Environmental and Bowhead Specialty Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Environmental and Bowhead Specialty
The main advantage of trading using opposite American Environmental and Bowhead Specialty positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Environmental position performs unexpectedly, Bowhead Specialty 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 Bowhead Specialty will offset losses from the drop in Bowhead Specialty's long position.| American Environmental vs. Lipocine | American Environmental vs. Abcellera Biologics | American Environmental vs. Summit Therapeutics PLC | American Environmental vs. Acumen Pharmaceuticals |
| Bowhead Specialty vs. Sealed Air | Bowhead Specialty vs. Northstar Clean Technologies | Bowhead Specialty vs. China Clean Energy | Bowhead Specialty vs. Luxfer Holdings PLC |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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