Correlation Between Acm Research and Globalfoundries

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

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

Diversification Opportunities for Acm Research and Globalfoundries

-0.39

Correlation Coefficient

Acm Research  Globalfoundries

Very good diversification

The 3 months correlation between Acm and Globalfoundries is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Acm Research and Globalfoundries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Globalfoundries and Acm Research 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 Acm Research are associated (or correlated) with Globalfoundries. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Globalfoundries has no effect on the direction of Acm Research i.e., Acm Research and Globalfoundries go up and down completely randomly.

Pair Corralation between Acm Research and Globalfoundries

Given the investment horizon of 90 days Acm Research is expected to under-perform the Globalfoundries. In addition to that, Acm Research is 2.46 times more volatile than Globalfoundries. It trades about -0.14 of its total potential returns per unit of risk. Globalfoundries is currently generating about 0.16 per unit of volatility. If you would invest  4,129  in Globalfoundries on September 16, 2024 and sell it today you would earn a total of  259.00  from holding Globalfoundries or generate 6.27% return on investment over 90 days.

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

Acm Research  vs.  Globalfoundries

Acm Research

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Acm Research has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable primary indicators, Acm Research is not utilizing all of its potentials. The newest stock price agitation, may contribute to short-term losses for the retail investors.

Globalfoundries

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Globalfoundries are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak technical and fundamental indicators, Globalfoundries unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Acm Research and Globalfoundries

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

The idea behind Acm Research and Globalfoundries 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.

Check out your portfolio center.

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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.