Correlation Between Tower Investments and Amica SA
Can any of the company-specific risk be diversified away by investing in both Tower Investments and Amica 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 Tower Investments and Amica SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tower Investments SA and Amica SA, you can compare the effects of market volatilities on Tower Investments and Amica 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 Tower Investments with a short position of Amica SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tower Investments and Amica SA.
Diversification Opportunities for Tower Investments and Amica SA
0.19 | Correlation Coefficient |
Average diversification
The 3 months correlation between Tower and Amica is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Tower Investments SA and Amica SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amica SA and Tower Investments 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 Tower Investments SA are associated (or correlated) with Amica SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amica SA has no effect on the direction of Tower Investments i.e., Tower Investments and Amica SA go up and down completely randomly.
Pair Corralation between Tower Investments and Amica SA
Assuming the 90 days trading horizon Tower Investments SA is expected to under-perform the Amica SA. In addition to that, Tower Investments is 3.46 times more volatile than Amica SA. It trades about -0.02 of its total potential returns per unit of risk. Amica SA is currently generating about -0.03 per unit of volatility. If you would invest 8,151 in Amica SA on September 4, 2024 and sell it today you would lose (1,971) from holding Amica SA or give up 24.18% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tower Investments SA vs. Amica SA
Performance |
| Timeline |
| Tower Investments |
| Amica SA |
Tower Investments and Amica SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tower Investments and Amica SA
The main advantage of trading using opposite Tower Investments and Amica SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tower Investments position performs unexpectedly, Amica 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 Amica SA will offset losses from the drop in Amica SA's long position.| Tower Investments vs. Marie Brizard Wine | Tower Investments vs. Skyline Investment SA | Tower Investments vs. UF Games SA | Tower Investments vs. Mercator Medical SA |
| Amica SA vs. Biztech Konsulting SA | Amica SA vs. Gamedust SA | Amica SA vs. PZ Cormay SA | Amica SA vs. Skyline Investment SA |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
Other Complementary Tools
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings |