Correlation Between AMPACS Corp and Coretronic

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

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

Diversification Opportunities for AMPACS Corp and Coretronic

-0.69

Correlation Coefficient

AMPACS Corp  Coretronic

Excellent diversification

The 3 months correlation between AMPACS and Coretronic is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding AMPACS Corp and Coretronic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Coretronic 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 Coretronic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Coretronic has no effect on the direction of AMPACS Corp i.e., AMPACS Corp and Coretronic go up and down completely randomly.

Pair Corralation between AMPACS Corp and Coretronic

Assuming the 90 days trading horizon AMPACS Corp is expected to generate 0.41 times more return on investment than Coretronic. However, AMPACS Corp is 2.45 times less risky than Coretronic. It trades about -0.02 of its potential returns per unit of risk. Coretronic is currently generating about -0.03 per unit of risk. If you would invest  4,185  in AMPACS Corp on October 23, 2024 and sell it today you would lose (30.00) from holding AMPACS Corp or give up 0.72% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	95.24%
Values	Daily Returns

AMPACS Corp  vs.  Coretronic

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 February 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Coretronic

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Coretronic are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Coretronic may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with AMPACS Corp and Coretronic

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

The idea behind AMPACS Corp and Coretronic 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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.