Correlation Between Adams Natural and American Mutual
Can any of the company-specific risk be diversified away by investing in both Adams Natural and American Mutual 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 Adams Natural and American Mutual into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Adams Natural Resources and American Mutual Fund, you can compare the effects of market volatilities on Adams Natural and American Mutual 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 Adams Natural with a short position of American Mutual. Check out your portfolio center. Please also check ongoing floating volatility patterns of Adams Natural and American Mutual.
Diversification Opportunities for Adams Natural and American Mutual
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Adams and American is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Adams Natural Resources and American Mutual Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Mutual and Adams Natural 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 Adams Natural Resources are associated (or correlated) with American Mutual. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American Mutual has no effect on the direction of Adams Natural i.e., Adams Natural and American Mutual go up and down completely randomly.
Pair Corralation between Adams Natural and American Mutual
If you would invest 1,912 in Adams Natural Resources on September 14, 2024 and sell it today you would earn a total of 323.00 from holding Adams Natural Resources or generate 16.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 0.0% |
| Values | Daily Returns |
Adams Natural Resources vs. American Mutual Fund
Performance |
| Timeline |
| Adams Natural Resources |
| American Mutual |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Adams Natural and American Mutual Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Adams Natural and American Mutual
The main advantage of trading using opposite Adams Natural and American Mutual positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Adams Natural position performs unexpectedly, American Mutual 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 Mutual will offset losses from the drop in American Mutual's long position.| Adams Natural vs. Liberty All Star | Adams Natural vs. Tri Continental Closed | Adams Natural vs. Royce Value Closed | Adams Natural vs. Central Securities |
| American Mutual vs. Franklin Federal Limited Term | American Mutual vs. Boston Partners Longshort | American Mutual vs. Prudential Short Duration | American Mutual vs. Virtus Multi Sector Short |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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