Correlation Between BrainChip Holdings and Ams AG
Can any of the company-specific risk be diversified away by investing in both BrainChip Holdings and Ams AG 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 BrainChip Holdings and Ams AG into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BrainChip Holdings and ams AG, you can compare the effects of market volatilities on BrainChip Holdings and Ams AG 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 BrainChip Holdings with a short position of Ams AG. Check out your portfolio center. Please also check ongoing floating volatility patterns of BrainChip Holdings and Ams AG.
Diversification Opportunities for BrainChip Holdings and Ams AG
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between BrainChip and Ams is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding BrainChip Holdings and ams AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ams AG and BrainChip Holdings 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 BrainChip Holdings are associated (or correlated) with Ams AG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ams AG has no effect on the direction of BrainChip Holdings i.e., BrainChip Holdings and Ams AG go up and down completely randomly.
Pair Corralation between BrainChip Holdings and Ams AG
Assuming the 90 days horizon BrainChip Holdings is expected to generate 366.72 times less return on investment than Ams AG. But when comparing it to its historical volatility, BrainChip Holdings is 30.39 times less risky than Ams AG. It trades about 0.02 of its potential returns per unit of risk. ams AG is currently generating about 0.27 of returns per unit of risk over similar time horizon. If you would invest 226.00 in ams AG on August 25, 2024 and sell it today you would earn a total of 519.00 from holding ams AG or generate 229.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
BrainChip Holdings vs. ams AG
Performance |
| Timeline |
| BrainChip Holdings |
| ams AG |
BrainChip Holdings and Ams AG Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BrainChip Holdings and Ams AG
The main advantage of trading using opposite BrainChip Holdings and Ams AG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BrainChip Holdings position performs unexpectedly, Ams AG 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 Ams AG will offset losses from the drop in Ams AG's long position.| BrainChip Holdings vs. Sitime | BrainChip Holdings vs. Alpha and Omega | BrainChip Holdings vs. MaxLinear | BrainChip Holdings vs. NVE Corporation |
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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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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