Correlation Between San Juan and American Fds

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Can any of the company-specific risk be diversified away by investing in both San Juan and American Fds 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 San Juan and American Fds into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between San Juan Basin and American Fds 2015, you can compare the effects of market volatilities on San Juan and American Fds 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 San Juan with a short position of American Fds. Check out your portfolio center. Please also check ongoing floating volatility patterns of San Juan and American Fds.

Diversification Opportunities for San Juan and American Fds

0.84
  Correlation Coefficient

Very poor diversification

The 3 months correlation between San Juan and American is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding San Juan Basin and American Fds 2015 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Fds 2015 and San Juan 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 San Juan Basin are associated (or correlated) with American Fds. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American Fds 2015 has no effect on the direction of San Juan i.e., San Juan and American Fds go up and down completely randomly.

Pair Corralation between San Juan and American Fds

Considering the 90-day investment horizon San Juan Basin is expected to generate 8.37 times more return on investment than American Fds. However, San Juan is 8.37 times more volatile than American Fds 2015. It trades about 0.22 of its potential returns per unit of risk. American Fds 2015 is currently generating about 0.25 per unit of risk. If you would invest  965.00  in San Juan Basin on May 15, 2022 and sell it today you would earn a total of  445.00  from holding San Juan Basin or generate 46.11% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthStrong
Accuracy97.67%
ValuesDaily Returns

San Juan Basin  vs.  American Fds 2015

 Performance (%) 
       Timeline  
San Juan Basin 
San Juan Performance
8 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in San Juan Basin are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively sluggish forward-looking indicators, San Juan unveiled solid returns over the last few months and may actually be approaching a breakup point.

San Juan Price Channel

American Fds 2015 
American Performance
2 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in American Fds 2015 are ranked lower than 2 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, American Fds is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

American Price Channel

San Juan and American Fds Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with San Juan and American Fds

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

San Juan Basin

Pair trading matchups for San Juan

The idea behind San Juan Basin and American Fds 2015 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.

American Fds 2015

Pair trading matchups for American Fds

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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.

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