Correlation Between Ama Marine and Getabec Public

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

Diversification Opportunities for Ama Marine and Getabec Public

0.74

Correlation Coefficient

Ama Marine  Getabec Public

Poor diversification

The 3 months correlation between Ama and Getabec is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Ama Marine Public and Getabec Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Getabec 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 Getabec Public. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Getabec Public has no effect on the direction of Ama Marine i.e., Ama Marine and Getabec Public go up and down completely randomly.

Pair Corralation between Ama Marine and Getabec Public

Assuming the 90 days trading horizon Ama Marine Public is expected to under-perform the Getabec Public. But the stock apears to be less risky and, when comparing its historical volatility, Ama Marine Public is 1.66 times less risky than Getabec Public. The stock trades about -0.13 of its potential returns per unit of risk. The Getabec Public is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest  75.00  in Getabec Public on September 18, 2024 and sell it today you would earn a total of  0.00  from holding Getabec Public or generate 0.0% return on investment over 90 days.

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

Ama Marine Public  vs.  Getabec Public

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 latest weak performance, the Stock's basic indicators remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the company institutional investors.

Getabec Public

Risk-Adjusted Performance

0 of 100

Weak

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

Pair Trading with Ama Marine and Getabec Public

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

The idea behind Ama Marine Public and Getabec 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.