Correlation Between AMPACS Corp and Auden Techno

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

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

Diversification Opportunities for AMPACS Corp and Auden Techno

0.81

Correlation Coefficient

AMPACS Corp  Auden Techno

Very poor diversification

The 3 months correlation between AMPACS and Auden is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding AMPACS Corp and Auden Techno in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Auden Techno and AMPACS Corp 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 AMPACS Corp are associated (or correlated) with Auden Techno. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Auden Techno has no effect on the direction of AMPACS Corp i.e., AMPACS Corp and Auden Techno go up and down completely randomly.

Pair Corralation between AMPACS Corp and Auden Techno

Assuming the 90 days trading horizon AMPACS Corp is expected to under-perform the Auden Techno. In addition to that, AMPACS Corp is 1.07 times more volatile than Auden Techno. It trades about -0.29 of its total potential returns per unit of risk. Auden Techno is currently generating about -0.06 per unit of volatility. If you would invest  12,000  in Auden Techno on September 17, 2024 and sell it today you would lose (1,100) from holding Auden Techno or give up 9.17% of portfolio value over 90 days.

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

AMPACS Corp  vs.  Auden Techno

AMPACS Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days AMPACS Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in January 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Auden Techno

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Auden Techno 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.

Pair Trading with AMPACS Corp and Auden Techno

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

The idea behind AMPACS Corp and Auden Techno 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..