Correlation Between American Equity and American National
Can any of the company-specific risk be diversified away by investing in both American Equity and American National 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 Equity and American National into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American Equity Investment and American National Insurance, you can compare the effects of market volatilities on American Equity and American National 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 Equity with a short position of American National. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Equity and American National.
Diversification Opportunities for American Equity and American National
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between American and American is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding American Equity Investment and American National Insurance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American National and American Equity 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 Equity Investment are associated (or correlated) with American National. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American National has no effect on the direction of American Equity i.e., American Equity and American National go up and down completely randomly.
Pair Corralation between American Equity and American National
If you would invest 5,520 in American Equity Investment on January 24, 2024 and sell it today you would earn a total of 65.00 from holding American Equity Investment or generate 1.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 2.38% |
| Values | Daily Returns |
American Equity Investment vs. American National Insurance
Performance |
| Timeline |
| American Equity Inve |
| American National |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
American Equity and American National Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Equity and American National
The main advantage of trading using opposite American Equity and American National positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Equity position performs unexpectedly, American National 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 National will offset losses from the drop in American National's long position.The idea behind American Equity Investment and American National Insurance 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 National vs. Westinghouse Air Brake | American National vs. NiSource | American National vs. WEC Energy Group | American National vs. Atmos Energy |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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