Correlation Between Ads Tec and Amprius Technologies

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

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

Diversification Opportunities for Ads Tec and Amprius Technologies

0.62

Correlation Coefficient

Ads Tec  Amprius Technologies

Poor diversification

The 3 months correlation between Ads and Amprius is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Ads Tec Energy and Amprius Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amprius Technologies and Ads Tec 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 Ads Tec Energy are associated (or correlated) with Amprius Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amprius Technologies has no effect on the direction of Ads Tec i.e., Ads Tec and Amprius Technologies go up and down completely randomly.

Pair Corralation between Ads Tec and Amprius Technologies

Given the investment horizon of 90 days Ads Tec is expected to generate 18.17 times less return on investment than Amprius Technologies. But when comparing it to its historical volatility, Ads Tec Energy is 4.03 times less risky than Amprius Technologies. It trades about 0.01 of its potential returns per unit of risk. Amprius Technologies is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  298.00  in Amprius Technologies on December 28, 2024 and sell it today you would lose (3.00) from holding Amprius Technologies or give up 1.01% of portfolio value over 90 days.

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

Ads Tec Energy  vs.  Amprius Technologies

Ads Tec Energy

Risk-Adjusted Performance

Very Weak

Over the last 90 days Ads Tec Energy has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, Ads Tec is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Amprius Technologies

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Amprius Technologies are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unsteady basic indicators, Amprius Technologies showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Ads Tec and Amprius Technologies

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

The idea behind Ads Tec Energy and Amprius Technologies 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.