Correlation Between Ampleforth and Advance United
Can any of the company-specific risk be diversified away by investing in both Ampleforth and Advance United 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 Ampleforth and Advance United into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ampleforth and Advance United Holdings, you can compare the effects of market volatilities on Ampleforth and Advance United 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 Ampleforth with a short position of Advance United. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ampleforth and Advance United.
Diversification Opportunities for Ampleforth and Advance United
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Ampleforth and Advance is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Ampleforth and Advance United Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Advance United Holdings and Ampleforth 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 Ampleforth are associated (or correlated) with Advance United. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Advance United Holdings has no effect on the direction of Ampleforth i.e., Ampleforth and Advance United go up and down completely randomly.
Pair Corralation between Ampleforth and Advance United
Assuming the 90 days trading horizon Ampleforth is expected to generate 0.93 times more return on investment than Advance United. However, Ampleforth is 1.08 times less risky than Advance United. It trades about 0.05 of its potential returns per unit of risk. Advance United Holdings is currently generating about -0.04 per unit of risk. If you would invest 104.00 in Ampleforth on September 4, 2024 and sell it today you would earn a total of 30.00 from holding Ampleforth or generate 28.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 45.97% |
| Values | Daily Returns |
Ampleforth vs. Advance United Holdings
Performance |
| Timeline |
| Ampleforth |
| Advance United Holdings |
Ampleforth and Advance United Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ampleforth and Advance United
The main advantage of trading using opposite Ampleforth and Advance United positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ampleforth position performs unexpectedly, Advance United 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 Advance United will offset losses from the drop in Advance United's long position.The idea behind Ampleforth and Advance United Holdings 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.| Advance United vs. Harmony Gold Mining | Advance United vs. SPACE | Advance United vs. T Rowe Price | Advance United vs. Ampleforth |
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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