Correlation Between Addtech and AMG Advanced
Can any of the company-specific risk be diversified away by investing in both Addtech and AMG Advanced 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 Addtech and AMG Advanced into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Addtech and AMG Advanced Metallurgical, you can compare the effects of market volatilities on Addtech and AMG Advanced 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 Addtech with a short position of AMG Advanced. Check out your portfolio center. Please also check ongoing floating volatility patterns of Addtech and AMG Advanced.
Diversification Opportunities for Addtech and AMG Advanced
0.04 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Addtech and AMG is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Addtech and AMG Advanced Metallurgical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AMG Advanced Metallu and Addtech 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 Addtech are associated (or correlated) with AMG Advanced. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AMG Advanced Metallu has no effect on the direction of Addtech i.e., Addtech and AMG Advanced go up and down completely randomly.
Pair Corralation between Addtech and AMG Advanced
Assuming the 90 days trading horizon Addtech is expected to generate 0.48 times more return on investment than AMG Advanced. However, Addtech is 2.08 times less risky than AMG Advanced. It trades about 0.18 of its potential returns per unit of risk. AMG Advanced Metallurgical is currently generating about 0.0 per unit of risk. If you would invest 30,420 in Addtech on November 3, 2024 and sell it today you would earn a total of 2,160 from holding Addtech or generate 7.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Addtech vs. AMG Advanced Metallurgical
Performance |
| Timeline |
| Addtech |
| AMG Advanced Metallu |
Addtech and AMG Advanced Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Addtech and AMG Advanced
The main advantage of trading using opposite Addtech and AMG Advanced positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Addtech position performs unexpectedly, AMG Advanced 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 AMG Advanced will offset losses from the drop in AMG Advanced's long position.| Addtech vs. Worldwide Healthcare Trust | Addtech vs. CVS Health Corp | Addtech vs. G5 Entertainment AB | Addtech vs. Inspiration Healthcare Group |
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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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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