Correlation Between American Axle and ETRADE Financial
Can any of the company-specific risk be diversified away by investing in both American Axle and ETRADE 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 American Axle and ETRADE Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American Axle Manufacturing and ETRADE Financial LLC, you can compare the effects of market volatilities on American Axle and ETRADE 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 American Axle with a short position of ETRADE Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Axle and ETRADE Financial.
Diversification Opportunities for American Axle and ETRADE Financial
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between American and ETRADE is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding American Axle Manufacturing and ETRADE Financial LLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ETRADE Financial LLC and American Axle 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 Axle Manufacturing are associated (or correlated) with ETRADE Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ETRADE Financial LLC has no effect on the direction of American Axle i.e., American Axle and ETRADE Financial go up and down completely randomly.
Pair Corralation between American Axle and ETRADE Financial
If you would invest (100.00) in ETRADE Financial LLC on February 26, 2024 and sell it today you would earn a total of 100.00 from holding ETRADE Financial LLC or generate -100.0% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Flat |
Strength | Insignificant |
Accuracy | 0.0% |
Values | Daily Returns |
American Axle Manufacturing vs. ETRADE Financial LLC
Performance |
Timeline |
American Axle Manufa |
ETRADE Financial LLC |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
American Axle and ETRADE Financial Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with American Axle and ETRADE Financial
The main advantage of trading using opposite American Axle and ETRADE Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Axle position performs unexpectedly, ETRADE 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 ETRADE Financial will offset losses from the drop in ETRADE Financial's long position.American Axle vs. Hyliion Holdings Corp | American Axle vs. Aeva Technologies | American Axle vs. Aeye Inc | American Axle vs. Westport Fuel Systems |
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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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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