Correlation Between Progressive Corp and Amtech Systems
Can any of the company-specific risk be diversified away by investing in both Progressive Corp and Amtech Systems 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 Progressive Corp and Amtech Systems into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Progressive Corp and Amtech Systems, you can compare the effects of market volatilities on Progressive Corp and Amtech Systems 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 Progressive Corp with a short position of Amtech Systems. Check out your portfolio center. Please also check ongoing floating volatility patterns of Progressive Corp and Amtech Systems.
Diversification Opportunities for Progressive Corp and Amtech Systems
-0.25 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Progressive and Amtech is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding Progressive Corp and Amtech Systems in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amtech Systems and Progressive Corp 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 Progressive Corp are associated (or correlated) with Amtech Systems. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amtech Systems has no effect on the direction of Progressive Corp i.e., Progressive Corp and Amtech Systems go up and down completely randomly.
Pair Corralation between Progressive Corp and Amtech Systems
Considering the 90-day investment horizon Progressive Corp is expected to generate 0.86 times more return on investment than Amtech Systems. However, Progressive Corp is 1.17 times less risky than Amtech Systems. It trades about 0.28 of its potential returns per unit of risk. Amtech Systems is currently generating about 0.08 per unit of risk. If you would invest 24,431 in Progressive Corp on August 28, 2024 and sell it today you would earn a total of 2,157 from holding Progressive Corp or generate 8.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Progressive Corp vs. Amtech Systems
Performance |
| Timeline |
| Progressive Corp |
| Amtech Systems |
Progressive Corp and Amtech Systems Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Progressive Corp and Amtech Systems
The main advantage of trading using opposite Progressive Corp and Amtech Systems positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Progressive Corp position performs unexpectedly, Amtech Systems 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 Amtech Systems will offset losses from the drop in Amtech Systems' long position.| Progressive Corp vs. The Travelers Companies | Progressive Corp vs. Chubb | Progressive Corp vs. Cincinnati Financial | Progressive Corp vs. W R Berkley |
| Amtech Systems vs. Ultra Clean Holdings | Amtech Systems vs. Veeco Instruments | Amtech Systems vs. Cohu Inc | Amtech Systems vs. Onto Innovation |
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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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