Correlation Between Ama Marine and Twenty Four

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

By analyzing existing cross correlation between Ama Marine Public and Twenty Four Con Supply, you can compare the effects of market volatilities on Ama Marine and Twenty Four 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 Ama Marine with a short position of Twenty Four. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ama Marine and Twenty Four.

Diversification Opportunities for Ama Marine and Twenty Four

0.86

Correlation Coefficient

Ama Marine  Twenty Four

Very poor diversification

The 3 months correlation between Ama and Twenty is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Ama Marine Public and Twenty Four Con Supply in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Twenty Four Con and Ama Marine 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 Ama Marine Public are associated (or correlated) with Twenty Four. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Twenty Four Con has no effect on the direction of Ama Marine i.e., Ama Marine and Twenty Four go up and down completely randomly.

Pair Corralation between Ama Marine and Twenty Four

Assuming the 90 days trading horizon Ama Marine Public is expected to generate 0.36 times more return on investment than Twenty Four. However, Ama Marine Public is 2.76 times less risky than Twenty Four. It trades about 0.04 of its potential returns per unit of risk. Twenty Four Con Supply is currently generating about -0.23 per unit of risk. If you would invest  420.00  in Ama Marine Public on October 4, 2024 and sell it today you would earn a total of  2.00  from holding Ama Marine Public or generate 0.48% return on investment over 90 days.

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

Ama Marine Public  vs.  Twenty Four Con Supply

Ama Marine Public

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Ama Marine Public has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent basic indicators, Ama Marine is not utilizing all of its potentials. The current stock price mess, may contribute to short-term losses for the institutional investors.

Twenty Four Con

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Twenty Four Con Supply has generated negative risk-adjusted returns adding no value to investors with long positions. Despite conflicting performance in the last few months, the Stock's forward-looking signals remain quite persistent which may send shares a bit higher in February 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Pair Trading with Ama Marine and Twenty Four

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

The idea behind Ama Marine Public and Twenty Four Con Supply 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.