Correlation Between Amanet Management and Adgar Investments

Can any of the company-specific risk be diversified away by investing in both Amanet Management and Adgar Investments 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 Amanet Management and Adgar Investments into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Amanet Management Systems and Adgar Investments and, you can compare the effects of market volatilities on Amanet Management and Adgar Investments 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 Amanet Management with a short position of Adgar Investments. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amanet Management and Adgar Investments.

Diversification Opportunities for Amanet Management and Adgar Investments

-0.43

Correlation Coefficient

Amanet Management  Adgar Investments

Very good diversification

The 3 months correlation between Amanet and Adgar is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Amanet Management Systems and Adgar Investments and in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Adgar Investments and Amanet Management 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 Amanet Management Systems are associated (or correlated) with Adgar Investments. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Adgar Investments has no effect on the direction of Amanet Management i.e., Amanet Management and Adgar Investments go up and down completely randomly.

Pair Corralation between Amanet Management and Adgar Investments

Assuming the 90 days trading horizon Amanet Management Systems is expected to generate 1.7 times more return on investment than Adgar Investments. However, Amanet Management is 1.7 times more volatile than Adgar Investments and. It trades about 0.12 of its potential returns per unit of risk. Adgar Investments and is currently generating about -0.26 per unit of risk. If you would invest  159,500  in Amanet Management Systems on December 22, 2024 and sell it today you would earn a total of  23,400  from holding Amanet Management Systems or generate 14.67% return on investment over 90 days.

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

Amanet Management Systems  vs.  Adgar Investments and

Amanet Management Systems

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Amanet Management Systems are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Amanet Management sustained solid returns over the last few months and may actually be approaching a breakup point.

Adgar Investments

Risk-Adjusted Performance

Very Weak

Over the last 90 days Adgar Investments and has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Amanet Management and Adgar Investments

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

The idea behind Amanet Management Systems and Adgar Investments and 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.