Correlation Between Tenneco and American Mutual
Can any of the company-specific risk be diversified away by investing in both Tenneco and American Mutual 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 Tenneco and American Mutual into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tenneco and American Mutual Fund, you can compare the effects of market volatilities on Tenneco and American Mutual 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 Tenneco with a short position of American Mutual. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tenneco and American Mutual.
Diversification Opportunities for Tenneco and American Mutual
-0.19 | Correlation Coefficient |
Good diversification
The 3 months correlation between Tenneco and American is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Tenneco and American Mutual Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Mutual and Tenneco 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 Tenneco are associated (or correlated) with American Mutual. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American Mutual has no effect on the direction of Tenneco i.e., Tenneco and American Mutual go up and down completely randomly.
Pair Corralation between Tenneco and American Mutual
If you would invest 4,571 in American Mutual Fund on January 24, 2024 and sell it today you would earn a total of 544.00 from holding American Mutual Fund or generate 11.9% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 0.35% |
Values | Daily Returns |
Tenneco vs. American Mutual Fund
Performance |
Timeline |
Tenneco |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
American Mutual |
Tenneco and American Mutual Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Tenneco and American Mutual
The main advantage of trading using opposite Tenneco and American Mutual positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tenneco position performs unexpectedly, American Mutual 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 Mutual will offset losses from the drop in American Mutual's long position.Tenneco vs. Encore Wire | Tenneco vs. SkyWest | Tenneco vs. Air Transport Services | Tenneco vs. United Airlines Holdings |
American Mutual vs. American Funds Fundamental | American Mutual vs. Amcap Fund Class | American Mutual vs. New Perspective Fund | American Mutual vs. American Balanced Fund |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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