Correlation Between Amtran Technology and P Duke

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

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

Diversification Opportunities for Amtran Technology and P Duke

0.58

Correlation Coefficient

Amtran Technology  P Duke

Very weak diversification

The 3 months correlation between Amtran and 8109 is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Amtran Technology Co and P Duke Technology Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on P Duke Technology and Amtran Technology 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 Amtran Technology Co are associated (or correlated) with P Duke. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of P Duke Technology has no effect on the direction of Amtran Technology i.e., Amtran Technology and P Duke go up and down completely randomly.

Pair Corralation between Amtran Technology and P Duke

Assuming the 90 days trading horizon Amtran Technology Co is expected to generate 1.98 times more return on investment than P Duke. However, Amtran Technology is 1.98 times more volatile than P Duke Technology Co. It trades about 0.07 of its potential returns per unit of risk. P Duke Technology Co is currently generating about 0.02 per unit of risk. If you would invest  993.00  in Amtran Technology Co on September 23, 2024 and sell it today you would earn a total of  922.00  from holding Amtran Technology Co or generate 92.85% return on investment over 90 days.

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

Amtran Technology Co  vs.  P Duke Technology Co

Amtran Technology

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Amtran Technology Co has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest abnormal performance, the Stock's basic indicators remain stable and the latest fuss on Wall Street may also be a sign of long-term gains for the venture sophisticated investors.

P Duke Technology

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days P Duke Technology Co has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, P Duke is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Amtran Technology and P Duke

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

The idea behind Amtran Technology Co and P Duke Technology 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.