Correlation Between Asia Tech and Ampire

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

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

Diversification Opportunities for Asia Tech and Ampire

-0.47

Correlation Coefficient

Asia Tech  Ampire

Very good diversification

The 3 months correlation between Asia and Ampire is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Asia Tech Image and Ampire Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ampire and Asia Tech 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 Asia Tech Image are associated (or correlated) with Ampire. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ampire has no effect on the direction of Asia Tech i.e., Asia Tech and Ampire go up and down completely randomly.

Pair Corralation between Asia Tech and Ampire

Assuming the 90 days trading horizon Asia Tech Image is expected to generate 3.86 times more return on investment than Ampire. However, Asia Tech is 3.86 times more volatile than Ampire Co. It trades about 0.11 of its potential returns per unit of risk. Ampire Co is currently generating about 0.02 per unit of risk. If you would invest  9,370  in Asia Tech Image on December 5, 2024 and sell it today you would earn a total of  2,280  from holding Asia Tech Image or generate 24.33% return on investment over 90 days.

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

Asia Tech Image  vs.  Ampire Co

Asia Tech Image

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Asia Tech Image are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Asia Tech showed solid returns over the last few months and may actually be approaching a breakup point.

Ampire

Risk-Adjusted Performance

Very Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Ampire Co are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of fairly stable basic indicators, Ampire 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 Asia Tech and Ampire

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

The idea behind Asia Tech Image and Ampire 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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.