Correlation Between Advanced Micro and Vestis
Can any of the company-specific risk be diversified away by investing in both Advanced Micro and Vestis 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 Micro and Vestis into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Advanced Micro Devices and Vestis, you can compare the effects of market volatilities on Advanced Micro and Vestis 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 Micro with a short position of Vestis. Check out your portfolio center. Please also check ongoing floating volatility patterns of Advanced Micro and Vestis.
Diversification Opportunities for Advanced Micro and Vestis
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Advanced and Vestis is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Advanced Micro Devices and Vestis in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vestis and Advanced Micro 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 Micro Devices are associated (or correlated) with Vestis. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vestis has no effect on the direction of Advanced Micro i.e., Advanced Micro and Vestis go up and down completely randomly.
Pair Corralation between Advanced Micro and Vestis
Considering the 90-day investment horizon Advanced Micro Devices is expected to under-perform the Vestis. But the stock apears to be less risky and, when comparing its historical volatility, Advanced Micro Devices is 1.36 times less risky than Vestis. The stock trades about -0.22 of its potential returns per unit of risk. The Vestis is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 1,413 in Vestis on August 29, 2024 and sell it today you would earn a total of 205.00 from holding Vestis or generate 14.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Advanced Micro Devices vs. Vestis
Performance |
| Timeline |
| Advanced Micro Devices |
| Vestis |
Advanced Micro and Vestis Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Advanced Micro and Vestis
The main advantage of trading using opposite Advanced Micro and Vestis positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Advanced Micro position performs unexpectedly, Vestis 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 Vestis will offset losses from the drop in Vestis' long position.| Advanced Micro vs. Taiwan Semiconductor Manufacturing | Advanced Micro vs. Intel | Advanced Micro vs. Marvell Technology Group | Advanced Micro vs. Micron Technology |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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