Correlation Between Amplitude and Vacasa

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Can any of the company-specific risk be diversified away by investing in both Amplitude and Vacasa 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 Amplitude and Vacasa into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Amplitude and Vacasa Inc, you can compare the effects of market volatilities on Amplitude and Vacasa 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 Amplitude with a short position of Vacasa. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amplitude and Vacasa.

Diversification Opportunities for Amplitude and Vacasa

0.64
  Correlation Coefficient

Poor diversification

The 3 months correlation between Amplitude and Vacasa is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Amplitude and Vacasa Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vacasa Inc and Amplitude 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 Amplitude are associated (or correlated) with Vacasa. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vacasa Inc has no effect on the direction of Amplitude i.e., Amplitude and Vacasa go up and down completely randomly.

Pair Corralation between Amplitude and Vacasa

Given the investment horizon of 90 days Amplitude is expected to generate 2.82 times more return on investment than Vacasa. However, Amplitude is 2.82 times more volatile than Vacasa Inc. It trades about 0.17 of its potential returns per unit of risk. Vacasa Inc is currently generating about 0.25 per unit of risk. If you would invest  1,090  in Amplitude on November 18, 2024 and sell it today you would earn a total of  114.00  from holding Amplitude or generate 10.46% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy100.0%
ValuesDaily Returns

Amplitude  vs.  Vacasa Inc

 Performance 
       Timeline  
Amplitude 

Risk-Adjusted Performance

OK

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Amplitude are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite quite abnormal basic indicators, Amplitude disclosed solid returns over the last few months and may actually be approaching a breakup point.
Vacasa Inc 

Risk-Adjusted Performance

Solid

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Vacasa Inc are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. Despite somewhat inconsistent basic indicators, Vacasa sustained solid returns over the last few months and may actually be approaching a breakup point.

Amplitude and Vacasa Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Amplitude and Vacasa

The main advantage of trading using opposite Amplitude and Vacasa positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amplitude position performs unexpectedly, Vacasa 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 Vacasa will offset losses from the drop in Vacasa's long position.
The idea behind Amplitude and Vacasa Inc 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.
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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.

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