Correlation Between Advanced Braking and AMP
Can any of the company-specific risk be diversified away by investing in both Advanced Braking and AMP 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 Advanced Braking and AMP into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Advanced Braking Technology and AMP, you can compare the effects of market volatilities on Advanced Braking and AMP 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 Advanced Braking with a short position of AMP. Check out your portfolio center. Please also check ongoing floating volatility patterns of Advanced Braking and AMP.
Diversification Opportunities for Advanced Braking and AMP
-0.02 | Correlation Coefficient |
Good diversification
The 3 months correlation between Advanced and AMP is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Advanced Braking Technology and AMP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AMP and Advanced Braking 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 Advanced Braking Technology are associated (or correlated) with AMP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AMP has no effect on the direction of Advanced Braking i.e., Advanced Braking and AMP go up and down completely randomly.
Pair Corralation between Advanced Braking and AMP
Assuming the 90 days trading horizon Advanced Braking Technology is expected to under-perform the AMP. In addition to that, Advanced Braking is 1.18 times more volatile than AMP. It trades about -0.03 of its total potential returns per unit of risk. AMP is currently generating about 0.14 per unit of volatility. If you would invest 163.00 in AMP on October 25, 2024 and sell it today you would earn a total of 6.00 from holding AMP or generate 3.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Advanced Braking Technology vs. AMP
Performance |
| Timeline |
| Advanced Braking Tec |
| AMP |
Advanced Braking and AMP Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Advanced Braking and AMP
The main advantage of trading using opposite Advanced Braking and AMP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Advanced Braking position performs unexpectedly, AMP 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 AMP will offset losses from the drop in AMP's long position.| Advanced Braking vs. Maggie Beer Holdings | Advanced Braking vs. Queste Communications | Advanced Braking vs. TPG Telecom | Advanced Braking vs. Perpetual Credit Income |
| AMP vs. Complii FinTech Solutions | AMP vs. Australian Agricultural | AMP vs. High Tech Metals | AMP vs. Lendlease Group |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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