Correlation Between Ama Marine and Advanced Info

Can any of the company-specific risk be diversified away by investing in both Ama Marine and Advanced Info 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 Advanced Info 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 Advanced Info Service, you can compare the effects of market volatilities on Ama Marine and Advanced Info 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 Advanced Info. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ama Marine and Advanced Info.

Diversification Opportunities for Ama Marine and Advanced Info

-0.75

Correlation Coefficient

Ama Marine  Advanced Info

Pay attention - limited upside

The 3 months correlation between Ama and Advanced is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding Ama Marine Public and Advanced Info Service in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Advanced Info Service 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 Advanced Info. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Advanced Info Service has no effect on the direction of Ama Marine i.e., Ama Marine and Advanced Info go up and down completely randomly.

Pair Corralation between Ama Marine and Advanced Info

Assuming the 90 days trading horizon Ama Marine Public is expected to under-perform the Advanced Info. In addition to that, Ama Marine is 1.37 times more volatile than Advanced Info Service. It trades about -0.01 of its total potential returns per unit of risk. Advanced Info Service is currently generating about 0.08 per unit of volatility. If you would invest  18,632  in Advanced Info Service on October 4, 2024 and sell it today you would earn a total of  10,068  from holding Advanced Info Service or generate 54.04% return on investment over 90 days.

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

Ama Marine Public  vs.  Advanced Info Service

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.

Advanced Info Service

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Advanced Info Service are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite somewhat conflicting basic indicators, Advanced Info may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Ama Marine and Advanced Info

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

The idea behind Ama Marine Public and Advanced Info Service 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.