Correlation Between AMERICAN and Natural Alternatives
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By analyzing existing cross correlation between AMERICAN WTR CAP and Natural Alternatives International, you can compare the effects of market volatilities on AMERICAN and Natural Alternatives 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 with a short position of Natural Alternatives. Check out your portfolio center. Please also check ongoing floating volatility patterns of AMERICAN and Natural Alternatives.
Diversification Opportunities for AMERICAN and Natural Alternatives
-0.29 | Correlation Coefficient |
Very good diversification
The 3 months correlation between AMERICAN and Natural is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding AMERICAN WTR CAP and Natural Alternatives Internati in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Natural Alternatives and AMERICAN 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 WTR CAP are associated (or correlated) with Natural Alternatives. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Natural Alternatives has no effect on the direction of AMERICAN i.e., AMERICAN and Natural Alternatives go up and down completely randomly.
Pair Corralation between AMERICAN and Natural Alternatives
Assuming the 90 days trading horizon AMERICAN WTR CAP is expected to generate 26.68 times more return on investment than Natural Alternatives. However, AMERICAN is 26.68 times more volatile than Natural Alternatives International. It trades about 0.08 of its potential returns per unit of risk. Natural Alternatives International is currently generating about -0.02 per unit of risk. If you would invest 8,921 in AMERICAN WTR CAP on September 2, 2024 and sell it today you would earn a total of 110.00 from holding AMERICAN WTR CAP or generate 1.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 57.66% |
| Values | Daily Returns |
AMERICAN WTR CAP vs. Natural Alternatives Internati
Performance |
| Timeline |
| AMERICAN WTR CAP |
| Natural Alternatives |
AMERICAN and Natural Alternatives Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AMERICAN and Natural Alternatives
The main advantage of trading using opposite AMERICAN and Natural Alternatives positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AMERICAN position performs unexpectedly, Natural Alternatives 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 Natural Alternatives will offset losses from the drop in Natural Alternatives' long position.| AMERICAN vs. Oatly Group AB | AMERICAN vs. Constellation Brands Class | AMERICAN vs. Cardinal Health | AMERICAN vs. Willamette Valley Vineyards |
| Natural Alternatives vs. Seneca Foods Corp | Natural Alternatives vs. Central Garden Pet | Natural Alternatives vs. Central Garden Pet | Natural Alternatives vs. Lifeway Foods |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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