Correlation Between Amata Summit and B GRIMM

Can any of the company-specific risk be diversified away by investing in both Amata Summit and B GRIMM 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 Amata Summit and B GRIMM into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Amata Summit Growth and B GRIMM POWER, you can compare the effects of market volatilities on Amata Summit and B GRIMM 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 Amata Summit with a short position of B GRIMM. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amata Summit and B GRIMM.

Diversification Opportunities for Amata Summit and B GRIMM

-0.55

Correlation Coefficient

Amata Summit  B GRIMM

Excellent diversification

The 3 months correlation between Amata and BGRIM-R is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Amata Summit Growth and B GRIMM POWER in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on B GRIMM POWER and Amata Summit 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 Amata Summit Growth are associated (or correlated) with B GRIMM. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of B GRIMM POWER has no effect on the direction of Amata Summit i.e., Amata Summit and B GRIMM go up and down completely randomly.

Pair Corralation between Amata Summit and B GRIMM

Assuming the 90 days trading horizon Amata Summit Growth is expected to generate 0.2 times more return on investment than B GRIMM. However, Amata Summit Growth is 5.07 times less risky than B GRIMM. It trades about 0.07 of its potential returns per unit of risk. B GRIMM POWER is currently generating about -0.37 per unit of risk. If you would invest  660.00  in Amata Summit Growth on October 12, 2024 and sell it today you would earn a total of  5.00  from holding Amata Summit Growth or generate 0.76% return on investment over 90 days.

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

Amata Summit Growth  vs.  B GRIMM POWER

Amata Summit Growth

Risk-Adjusted Performance

2 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Amata Summit Growth are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Amata Summit is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

B GRIMM POWER

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days B GRIMM POWER has generated negative risk-adjusted returns adding no value to investors with long positions. Even with weak performance in the last few months, the Stock's forward indicators remain relatively invariable which may send shares a bit higher in February 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Pair Trading with Amata Summit and B GRIMM

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

The idea behind Amata Summit Growth and B GRIMM POWER 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.