Correlation Between American International and Interactive Strength

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

By analyzing existing cross correlation between American International Holdings and Interactive Strength Common, you can compare the effects of market volatilities on American International and Interactive Strength 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 International with a short position of Interactive Strength. Check out your portfolio center. Please also check ongoing floating volatility patterns of American International and Interactive Strength.

Diversification Opportunities for American International and Interactive Strength

-0.22

Correlation Coefficient

American International  Interactive Strength

Very good diversification

The 3 months correlation between American and Interactive is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding American International Holding and Interactive Strength Common in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Interactive Strength and American International 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 International Holdings are associated (or correlated) with Interactive Strength. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Interactive Strength has no effect on the direction of American International i.e., American International and Interactive Strength go up and down completely randomly.

Pair Corralation between American International and Interactive Strength

Given the investment horizon of 90 days American International Holdings is expected to generate 12.8 times more return on investment than Interactive Strength. However, American International is 12.8 times more volatile than Interactive Strength Common. It trades about 0.16 of its potential returns per unit of risk. Interactive Strength Common is currently generating about -0.23 per unit of risk. If you would invest  0.01  in American International Holdings on September 2, 2024 and sell it today you would earn a total of  0.00  from holding American International Holdings or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.46%
Values	Daily Returns

American International Holding  vs.  Interactive Strength Common

American International

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in American International Holdings are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite fairly fragile forward indicators, American International demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Interactive Strength

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Interactive Strength Common has generated negative risk-adjusted returns adding no value to investors with long positions. Even with unfluctuating performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in January 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Pair Trading with American International and Interactive Strength

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

The idea behind American International Holdings and Interactive Strength Common 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 Global Correlations module to find global opportunities by holding instruments from different markets.