Correlation Between Midwest Holding and American Equity
Can any of the company-specific risk be diversified away by investing in both Midwest Holding and American Equity 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 Midwest Holding and American Equity into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Midwest Holding and American Equity Investment, you can compare the effects of market volatilities on Midwest Holding and American Equity 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 Midwest Holding with a short position of American Equity. Check out your portfolio center. Please also check ongoing floating volatility patterns of Midwest Holding and American Equity.
Diversification Opportunities for Midwest Holding and American Equity
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Midwest and American is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Midwest Holding and American Equity Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Equity Inve and Midwest Holding 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 Midwest Holding are associated (or correlated) with American Equity. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American Equity Inve has no effect on the direction of Midwest Holding i.e., Midwest Holding and American Equity go up and down completely randomly.
Pair Corralation between Midwest Holding and American Equity
If you would invest 5,585 in American Equity Investment on February 22, 2024 and sell it today you would earn a total of 62.00 from holding American Equity Investment or generate 1.11% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Flat |
Strength | Insignificant |
Accuracy | 10.0% |
Values | Daily Returns |
Midwest Holding vs. American Equity Investment
Performance |
Timeline |
Midwest Holding |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
American Equity Inve |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Good
Midwest Holding and American Equity Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Midwest Holding and American Equity
The main advantage of trading using opposite Midwest Holding and American Equity positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Midwest Holding position performs unexpectedly, American Equity 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 Equity will offset losses from the drop in American Equity's long position.Midwest Holding vs. Brighthouse Financial | Midwest Holding vs. Brighthouse Financial | Midwest Holding vs. FG Annuities Life | Midwest Holding vs. CNO Financial Group |
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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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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