Correlation Between NYSE Composite and Ams AG
Can any of the company-specific risk be diversified away by investing in both NYSE Composite 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 NYSE Composite and Ams AG into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and ams AG, you can compare the effects of market volatilities on NYSE Composite 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 NYSE Composite with a short position of Ams AG. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Ams AG.
Diversification Opportunities for NYSE Composite and Ams AG
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between NYSE and Ams is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and ams AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ams AG and NYSE Composite 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 NYSE Composite 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 NYSE Composite i.e., NYSE Composite and Ams AG go up and down completely randomly.
Pair Corralation between NYSE Composite and Ams AG
Assuming the 90 days trading horizon NYSE Composite is expected to generate 927.9 times less return on investment than Ams AG. But when comparing it to its historical volatility, NYSE Composite is 393.22 times less risky than Ams AG. It trades about 0.12 of its potential returns per unit of risk. ams AG is currently generating about 0.29 of returns per unit of risk over similar time horizon. If you would invest 264.00 in ams AG on August 25, 2024 and sell it today you would earn a total of 481.00 from holding ams AG or generate 182.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
NYSE Composite vs. ams AG
Performance |
| Timeline |
NYSE Composite and Ams AG Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
ams AG
Pair trading matchups for Ams AG
Pair Trading with NYSE Composite and Ams AG
The main advantage of trading using opposite NYSE Composite and Ams AG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite 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.| NYSE Composite vs. Glacier Bancorp | NYSE Composite vs. LithiumBank Resources Corp | NYSE Composite vs. Stepstone Group | NYSE Composite vs. Pintec Technology Holdings |
| Ams AG vs. NVIDIA | Ams AG vs. Intel | Ams AG vs. Taiwan Semiconductor Manufacturing | Ams AG vs. Marvell Technology Group |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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