Correlation Between Ama Marine and Arrow Syndicate

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

Diversification Opportunities for Ama Marine and Arrow Syndicate

-0.49

Correlation Coefficient

Ama Marine  Arrow Syndicate

Very good diversification

The 3 months correlation between Ama and Arrow is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Ama Marine Public and Arrow Syndicate Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Arrow Syndicate Public 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 Arrow Syndicate. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Arrow Syndicate Public has no effect on the direction of Ama Marine i.e., Ama Marine and Arrow Syndicate go up and down completely randomly.

Pair Corralation between Ama Marine and Arrow Syndicate

Assuming the 90 days trading horizon Ama Marine Public is expected to generate 0.61 times more return on investment than Arrow Syndicate. However, Ama Marine Public is 1.64 times less risky than Arrow Syndicate. It trades about 0.04 of its potential returns per unit of risk. Arrow Syndicate Public is currently generating about -0.1 per unit of risk. If you would invest  398.00  in Ama Marine Public on December 28, 2024 and sell it today you would earn a total of  6.00  from holding Ama Marine Public or generate 1.51% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	98.39%
Values	Daily Returns

Ama Marine Public  vs.  Arrow Syndicate Public

Ama Marine Public

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Ama Marine Public are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. 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.

Arrow Syndicate Public

Risk-Adjusted Performance

Very Weak

Over the last 90 days Arrow Syndicate Public has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest conflicting performance, the Stock's fundamental drivers remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with Ama Marine and Arrow Syndicate

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

The idea behind Ama Marine Public and Arrow Syndicate Public 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.