Correlation Between All For and American Picture

Can any of the company-specific risk be diversified away by investing in both All For and American Picture 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 All For and American Picture into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between All For One and American Picture House, you can compare the effects of market volatilities on All For and American Picture 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 All For with a short position of American Picture. Check out your portfolio center. Please also check ongoing floating volatility patterns of All For and American Picture.

Diversification Opportunities for All For and American Picture

0.21

Correlation Coefficient

All For  American Picture

Modest diversification

The 3 months correlation between All and American is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding All For One and American Picture House in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Picture House and All For 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 All For One are associated (or correlated) with American Picture. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American Picture House has no effect on the direction of All For i.e., All For and American Picture go up and down completely randomly.

Pair Corralation between All For and American Picture

Given the investment horizon of 90 days All For One is expected to generate 26.78 times more return on investment than American Picture. However, All For is 26.78 times more volatile than American Picture House. It trades about 0.1 of its potential returns per unit of risk. American Picture House is currently generating about 0.02 per unit of risk. If you would invest  0.01  in All For One on September 22, 2024 and sell it today you would lose (0.01) from holding All For One or give up 100.0% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

All For One  vs.  American Picture House

All For One

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in All For One are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of very uncertain basic indicators, All For displayed solid returns over the last few months and may actually be approaching a breakup point.

American Picture House

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in American Picture House are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Even with relatively uncertain technical indicators, American Picture may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with All For and American Picture

The main advantage of trading using opposite All For and American Picture positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if All For position performs unexpectedly, American Picture 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 Picture will offset losses from the drop in American Picture's long position.

The idea behind All For One and American Picture House pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Bonds Directory module to find actively traded corporate debentures issued by US companies.