Correlation Between AMPACS Corp and E Lead
Can any of the company-specific risk be diversified away by investing in both AMPACS Corp and E Lead 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 AMPACS Corp and E Lead into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AMPACS Corp and E Lead Electronic Co, you can compare the effects of market volatilities on AMPACS Corp and E Lead 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 AMPACS Corp with a short position of E Lead. Check out your portfolio center. Please also check ongoing floating volatility patterns of AMPACS Corp and E Lead.
Diversification Opportunities for AMPACS Corp and E Lead
0.96 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between AMPACS and 2497 is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding AMPACS Corp and E Lead Electronic Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on E Lead Electronic and AMPACS Corp 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 AMPACS Corp are associated (or correlated) with E Lead. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of E Lead Electronic has no effect on the direction of AMPACS Corp i.e., AMPACS Corp and E Lead go up and down completely randomly.
Pair Corralation between AMPACS Corp and E Lead
Assuming the 90 days trading horizon AMPACS Corp is expected to generate 1.2 times less return on investment than E Lead. But when comparing it to its historical volatility, AMPACS Corp is 1.11 times less risky than E Lead. It trades about 0.04 of its potential returns per unit of risk. E Lead Electronic Co is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 5,780 in E Lead Electronic Co on November 4, 2024 and sell it today you would earn a total of 50.00 from holding E Lead Electronic Co or generate 0.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
AMPACS Corp vs. E Lead Electronic Co
Performance |
| Timeline |
| AMPACS Corp |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| E Lead Electronic |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
AMPACS Corp and E Lead Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AMPACS Corp and E Lead
The main advantage of trading using opposite AMPACS Corp and E Lead positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AMPACS Corp position performs unexpectedly, E Lead 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 E Lead will offset losses from the drop in E Lead's long position.The idea behind AMPACS Corp and E Lead Electronic Co 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.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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
Other Complementary Tools
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules |