Correlation Between Safe and Amada
Can any of the company-specific risk be diversified away by investing in both Safe and Amada 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 Safe and Amada into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Safe and Green and Amada Co, you can compare the effects of market volatilities on Safe and Amada 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 Safe with a short position of Amada. Check out your portfolio center. Please also check ongoing floating volatility patterns of Safe and Amada.
Diversification Opportunities for Safe and Amada
Very good diversification
The 3 months correlation between Safe and Amada is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Safe and Green and Amada Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amada and Safe 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 Safe and Green are associated (or correlated) with Amada. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amada has no effect on the direction of Safe i.e., Safe and Amada go up and down completely randomly.
Pair Corralation between Safe and Amada
Considering the 90-day investment horizon Safe and Green is expected to under-perform the Amada. In addition to that, Safe is 4.63 times more volatile than Amada Co. It trades about -0.13 of its total potential returns per unit of risk. Amada Co is currently generating about -0.22 per unit of volatility. If you would invest 1,032 in Amada Co on September 5, 2024 and sell it today you would lose (102.00) from holding Amada Co or give up 9.88% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Safe and Green vs. Amada Co
Performance |
| Timeline |
| Safe and Green |
| Amada |
Safe and Amada Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Safe and Amada
The main advantage of trading using opposite Safe and Amada positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Safe position performs unexpectedly, Amada 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 Amada will offset losses from the drop in Amada's long position.| Safe vs. Frp Holdings Ord | Safe vs. Anywhere Real Estate | Safe vs. Re Max Holding | Safe vs. Cushman Wakefield plc |
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 Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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