Correlation Between Sypris Solutions and American Axle
Can any of the company-specific risk be diversified away by investing in both Sypris Solutions and American Axle 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 Sypris Solutions and American Axle into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sypris Solutions and American Axle Manufacturing, you can compare the effects of market volatilities on Sypris Solutions and American Axle 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 Sypris Solutions with a short position of American Axle. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sypris Solutions and American Axle.
Diversification Opportunities for Sypris Solutions and American Axle
-0.2 | Correlation Coefficient |
Good diversification
The 3 months correlation between Sypris and American is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding Sypris Solutions and American Axle Manufacturing in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Axle Manufa and Sypris Solutions 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 Sypris Solutions are associated (or correlated) with American Axle. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American Axle Manufa has no effect on the direction of Sypris Solutions i.e., Sypris Solutions and American Axle go up and down completely randomly.
Pair Corralation between Sypris Solutions and American Axle
Given the investment horizon of 90 days Sypris Solutions is expected to generate 1.15 times less return on investment than American Axle. But when comparing it to its historical volatility, Sypris Solutions is 1.46 times less risky than American Axle. It trades about 0.3 of its potential returns per unit of risk. American Axle Manufacturing is currently generating about 0.24 of returns per unit of risk over similar time horizon. If you would invest 581.00 in American Axle Manufacturing on August 31, 2024 and sell it today you would earn a total of 89.00 from holding American Axle Manufacturing or generate 15.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sypris Solutions vs. American Axle Manufacturing
Performance |
| Timeline |
| Sypris Solutions |
| American Axle Manufa |
Sypris Solutions and American Axle Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sypris Solutions and American Axle
The main advantage of trading using opposite Sypris Solutions and American Axle positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sypris Solutions position performs unexpectedly, American Axle 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 Axle will offset losses from the drop in American Axle's long position.| Sypris Solutions vs. Monro Muffler Brake | Sypris Solutions vs. Magna International | Sypris Solutions vs. BorgWarner | Sypris Solutions vs. Mobileye Global Class |
| American Axle vs. Gentex | American Axle vs. Adient PLC | American Axle vs. Autoliv | American Axle vs. Fox Factory Holding |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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