Correlation Between AMG Advanced and Ondine Biomedical
Can any of the company-specific risk be diversified away by investing in both AMG Advanced and Ondine Biomedical 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 AMG Advanced and Ondine Biomedical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AMG Advanced Metallurgical and Ondine Biomedical, you can compare the effects of market volatilities on AMG Advanced and Ondine Biomedical 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 AMG Advanced with a short position of Ondine Biomedical. Check out your portfolio center. Please also check ongoing floating volatility patterns of AMG Advanced and Ondine Biomedical.
Diversification Opportunities for AMG Advanced and Ondine Biomedical
-0.27 | Correlation Coefficient |
Very good diversification
The 3 months correlation between AMG and Ondine is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding AMG Advanced Metallurgical and Ondine Biomedical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ondine Biomedical and AMG Advanced 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 AMG Advanced Metallurgical are associated (or correlated) with Ondine Biomedical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ondine Biomedical has no effect on the direction of AMG Advanced i.e., AMG Advanced and Ondine Biomedical go up and down completely randomly.
Pair Corralation between AMG Advanced and Ondine Biomedical
Assuming the 90 days trading horizon AMG Advanced Metallurgical is expected to under-perform the Ondine Biomedical. But the stock apears to be less risky and, when comparing its historical volatility, AMG Advanced Metallurgical is 1.9 times less risky than Ondine Biomedical. The stock trades about -0.06 of its potential returns per unit of risk. The Ondine Biomedical is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest 2,200 in Ondine Biomedical on September 2, 2024 and sell it today you would lose (1,425) from holding Ondine Biomedical or give up 64.77% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
AMG Advanced Metallurgical vs. Ondine Biomedical
Performance |
| Timeline |
| AMG Advanced Metallu |
| Ondine Biomedical |
AMG Advanced and Ondine Biomedical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AMG Advanced and Ondine Biomedical
The main advantage of trading using opposite AMG Advanced and Ondine Biomedical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AMG Advanced position performs unexpectedly, Ondine Biomedical 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 Ondine Biomedical will offset losses from the drop in Ondine Biomedical's long position.| AMG Advanced vs. Uniper SE | AMG Advanced vs. Mulberry Group PLC | AMG Advanced vs. London Security Plc | AMG Advanced vs. Triad Group PLC |
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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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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