Correlation Between Amoeba SA and ST Dupont

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

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

Diversification Opportunities for Amoeba SA and ST Dupont

0.67

Correlation Coefficient

Amoeba SA  ST Dupont

Poor diversification

The 3 months correlation between Amoeba and DPT is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Amoeba SA and ST Dupont in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ST Dupont and Amoeba SA 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 Amoeba SA are associated (or correlated) with ST Dupont. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ST Dupont has no effect on the direction of Amoeba SA i.e., Amoeba SA and ST Dupont go up and down completely randomly.

Pair Corralation between Amoeba SA and ST Dupont

Assuming the 90 days trading horizon Amoeba SA is expected to generate 3.59 times more return on investment than ST Dupont. However, Amoeba SA is 3.59 times more volatile than ST Dupont. It trades about 0.29 of its potential returns per unit of risk. ST Dupont is currently generating about 0.0 per unit of risk. If you would invest  70.00  in Amoeba SA on September 16, 2024 and sell it today you would earn a total of  24.00  from holding Amoeba SA or generate 34.29% return on investment over 90 days.

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

Amoeba SA  vs.  ST Dupont

Amoeba SA

Risk-Adjusted Performance

21 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Amoeba SA are ranked lower than 21 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Amoeba SA reported solid returns over the last few months and may actually be approaching a breakup point.

ST Dupont

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in ST Dupont are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, ST Dupont sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Amoeba SA and ST Dupont

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

The idea behind Amoeba SA and ST Dupont 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.