Correlation Between Global Dominion and Amper SA
Can any of the company-specific risk be diversified away by investing in both Global Dominion and Amper SA 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 Global Dominion and Amper SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Global Dominion Access and Amper SA, you can compare the effects of market volatilities on Global Dominion and Amper SA 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 Global Dominion with a short position of Amper SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global Dominion and Amper SA.
Diversification Opportunities for Global Dominion and Amper SA
-0.47 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Global and Amper is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Global Dominion Access and Amper SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amper SA and Global Dominion 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 Global Dominion Access are associated (or correlated) with Amper SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amper SA has no effect on the direction of Global Dominion i.e., Global Dominion and Amper SA go up and down completely randomly.
Pair Corralation between Global Dominion and Amper SA
Assuming the 90 days trading horizon Global Dominion Access is expected to under-perform the Amper SA. But the stock apears to be less risky and, when comparing its historical volatility, Global Dominion Access is 2.45 times less risky than Amper SA. The stock trades about -0.05 of its potential returns per unit of risk. The Amper SA is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 9.81 in Amper SA on August 26, 2024 and sell it today you would earn a total of 1.19 from holding Amper SA or generate 12.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Global Dominion Access vs. Amper SA
Performance |
| Timeline |
| Global Dominion Access |
| Amper SA |
Global Dominion and Amper SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Global Dominion and Amper SA
The main advantage of trading using opposite Global Dominion and Amper SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global Dominion position performs unexpectedly, Amper SA 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 Amper SA will offset losses from the drop in Amper SA's long position.The idea behind Global Dominion Access and Amper SA 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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