Correlation Between Amogreentech and JETEMA

Can any of the company-specific risk be diversified away by investing in both Amogreentech and JETEMA 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 Amogreentech and JETEMA into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Amogreentech Co and JETEMA Co, you can compare the effects of market volatilities on Amogreentech and JETEMA 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 Amogreentech with a short position of JETEMA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amogreentech and JETEMA.

Diversification Opportunities for Amogreentech and JETEMA

-0.4

Correlation Coefficient

Amogreentech  JETEMA

Very good diversification

The 3 months correlation between Amogreentech and JETEMA is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Amogreentech Co and JETEMA Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JETEMA and Amogreentech 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 Amogreentech Co are associated (or correlated) with JETEMA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JETEMA has no effect on the direction of Amogreentech i.e., Amogreentech and JETEMA go up and down completely randomly.

Pair Corralation between Amogreentech and JETEMA

Assuming the 90 days trading horizon Amogreentech Co is expected to generate 1.07 times more return on investment than JETEMA. However, Amogreentech is 1.07 times more volatile than JETEMA Co. It trades about 0.01 of its potential returns per unit of risk. JETEMA Co is currently generating about -0.23 per unit of risk. If you would invest  622,000  in Amogreentech Co on December 3, 2024 and sell it today you would lose (3,000) from holding Amogreentech Co or give up 0.48% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Amogreentech Co  vs.  JETEMA Co

Amogreentech

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Amogreentech Co are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Amogreentech is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

JETEMA

Risk-Adjusted Performance

Very Weak

Over the last 90 days JETEMA Co has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Amogreentech and JETEMA

The main advantage of trading using opposite Amogreentech and JETEMA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amogreentech position performs unexpectedly, JETEMA 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 JETEMA will offset losses from the drop in JETEMA's long position.

The idea behind Amogreentech Co and JETEMA Co 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.

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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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.