Correlation Between Amata Summit and Techno Medical

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

Diversification Opportunities for Amata Summit and Techno Medical

-0.4

Correlation Coefficient

Amata Summit  Techno Medical

Very good diversification

The 3 months correlation between Amata and Techno is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Amata Summit Growth and Techno Medical Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Techno Medical Public 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 Techno Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Techno Medical Public has no effect on the direction of Amata Summit i.e., Amata Summit and Techno Medical go up and down completely randomly.

Pair Corralation between Amata Summit and Techno Medical

Assuming the 90 days trading horizon Amata Summit is expected to generate 48.04 times less return on investment than Techno Medical. But when comparing it to its historical volatility, Amata Summit Growth is 60.7 times less risky than Techno Medical. It trades about 0.05 of its potential returns per unit of risk. Techno Medical Public is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  260.00  in Techno Medical Public on October 4, 2024 and sell it today you would lose (161.00) from holding Techno Medical Public or give up 61.92% of portfolio value over 90 days.

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

Amata Summit Growth  vs.  Techno Medical Public

Amata Summit Growth

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Amata Summit Growth has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Amata Summit is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Techno Medical Public

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Techno Medical Public has generated negative risk-adjusted returns adding no value to investors with long positions. Despite conflicting performance in the last few months, the Stock's fundamental drivers remain quite persistent which may send shares a bit higher in February 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Pair Trading with Amata Summit and Techno Medical

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

The idea behind Amata Summit Growth and Techno Medical 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.