Correlation Between Ampire and TCI
Can any of the company-specific risk be diversified away by investing in both Ampire and TCI 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 Ampire and TCI into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ampire Co and TCI Co, you can compare the effects of market volatilities on Ampire and TCI 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 Ampire with a short position of TCI. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ampire and TCI.
Diversification Opportunities for Ampire and TCI
Very weak diversification
The 3 months correlation between Ampire and TCI is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Ampire Co and TCI Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TCI Co and Ampire 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 Ampire Co are associated (or correlated) with TCI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TCI Co has no effect on the direction of Ampire i.e., Ampire and TCI go up and down completely randomly.
Pair Corralation between Ampire and TCI
Assuming the 90 days trading horizon Ampire Co is expected to generate 0.7 times more return on investment than TCI. However, Ampire Co is 1.42 times less risky than TCI. It trades about -0.05 of its potential returns per unit of risk. TCI Co is currently generating about -0.07 per unit of risk. If you would invest 3,855 in Ampire Co on September 4, 2024 and sell it today you would lose (480.00) from holding Ampire Co or give up 12.45% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ampire Co vs. TCI Co
Performance |
| Timeline |
| Ampire |
| TCI Co |
Ampire and TCI Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ampire and TCI
The main advantage of trading using opposite Ampire and TCI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ampire position performs unexpectedly, TCI 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 TCI will offset losses from the drop in TCI's long position.| Ampire vs. Asia Tech Image | Ampire vs. Emerging Display Technologies | Ampire vs. DRWu Skincare Co | Ampire vs. Lanner Electronics |
| TCI vs. Ruentex Development Co | TCI vs. Symtek Automation Asia | TCI vs. CTCI Corp | TCI vs. Information Technology Total |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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