Correlation Between Amana Bank and EX PACK

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

By analyzing existing cross correlation between Amana Bank and EX PACK RUGATED CARTONS, you can compare the effects of market volatilities on Amana Bank and EX PACK 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 Amana Bank with a short position of EX PACK. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amana Bank and EX PACK.

Diversification Opportunities for Amana Bank and EX PACK

0.75

Correlation Coefficient

Amana Bank  EX PACK

Poor diversification

The 3 months correlation between Amana and PACKN0000 is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Amana Bank and EX PACK RUGATED CARTONS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EX PACK RUGATED and Amana Bank 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 Amana Bank are associated (or correlated) with EX PACK. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EX PACK RUGATED has no effect on the direction of Amana Bank i.e., Amana Bank and EX PACK go up and down completely randomly.

Pair Corralation between Amana Bank and EX PACK

Assuming the 90 days trading horizon Amana Bank is expected to generate 1.14 times less return on investment than EX PACK. But when comparing it to its historical volatility, Amana Bank is 1.62 times less risky than EX PACK. It trades about 0.32 of its potential returns per unit of risk. EX PACK RUGATED CARTONS is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest  1,490  in EX PACK RUGATED CARTONS on October 9, 2024 and sell it today you would earn a total of  140.00  from holding EX PACK RUGATED CARTONS or generate 9.4% return on investment over 90 days.

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

Amana Bank  vs.  EX PACK RUGATED CARTONS

Amana Bank

Risk-Adjusted Performance

18 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Amana Bank are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Amana Bank sustained solid returns over the last few months and may actually be approaching a breakup point.

EX PACK RUGATED

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in EX PACK RUGATED CARTONS are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, EX PACK sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Amana Bank and EX PACK

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

The idea behind Amana Bank and EX PACK RUGATED CARTONS 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..