Correlation Between Advanced Micro and WT Offshore
Can any of the company-specific risk be diversified away by investing in both Advanced Micro and WT Offshore 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 WT Offshore 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 WT Offshore, you can compare the effects of market volatilities on Advanced Micro and WT Offshore 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 WT Offshore. Check out your portfolio center. Please also check ongoing floating volatility patterns of Advanced Micro and WT Offshore.
Diversification Opportunities for Advanced Micro and WT Offshore
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Advanced and WTI is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Advanced Micro Devices and WT Offshore in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WT Offshore 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 WT Offshore. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WT Offshore has no effect on the direction of Advanced Micro i.e., Advanced Micro and WT Offshore go up and down completely randomly.
Pair Corralation between Advanced Micro and WT Offshore
Considering the 90-day investment horizon Advanced Micro Devices is expected to generate 0.67 times more return on investment than WT Offshore. However, Advanced Micro Devices is 1.49 times less risky than WT Offshore. It trades about -0.01 of its potential returns per unit of risk. WT Offshore is currently generating about -0.03 per unit of risk. If you would invest 14,636 in Advanced Micro Devices on August 28, 2024 and sell it today you would lose (523.00) from holding Advanced Micro Devices or give up 3.57% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Advanced Micro Devices vs. WT Offshore
Performance |
| Timeline |
| Advanced Micro Devices |
| WT Offshore |
Advanced Micro and WT Offshore Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Advanced Micro and WT Offshore
The main advantage of trading using opposite Advanced Micro and WT Offshore positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Advanced Micro position performs unexpectedly, WT Offshore 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 WT Offshore will offset losses from the drop in WT Offshore's long position.| Advanced Micro vs. Taiwan Semiconductor Manufacturing | Advanced Micro vs. Intel | Advanced Micro vs. Marvell Technology Group | Advanced Micro vs. Micron Technology |
| WT Offshore vs. Evolution Petroleum | WT Offshore vs. Ring Energy | WT Offshore vs. Gran Tierra Energy | WT Offshore vs. Permian Resources |
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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