Correlation Between Amarantus Bioscience and Nutanix

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

By analyzing existing cross correlation between Amarantus Bioscience Holdings and Nutanix, you can compare the effects of market volatilities on Amarantus Bioscience and Nutanix 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 Amarantus Bioscience with a short position of Nutanix. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amarantus Bioscience and Nutanix.

Diversification Opportunities for Amarantus Bioscience and Nutanix

-0.3

Correlation Coefficient

Amarantus Bioscience  Nutanix

Very good diversification

The 3 months correlation between Amarantus and Nutanix is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Amarantus Bioscience Holdings and Nutanix in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nutanix and Amarantus Bioscience 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 Amarantus Bioscience Holdings are associated (or correlated) with Nutanix. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nutanix has no effect on the direction of Amarantus Bioscience i.e., Amarantus Bioscience and Nutanix go up and down completely randomly.

Pair Corralation between Amarantus Bioscience and Nutanix

Given the investment horizon of 90 days Amarantus Bioscience Holdings is expected to generate 31.02 times more return on investment than Nutanix. However, Amarantus Bioscience is 31.02 times more volatile than Nutanix. It trades about 0.1 of its potential returns per unit of risk. Nutanix is currently generating about 0.05 per unit of risk. If you would invest  0.10  in Amarantus Bioscience Holdings on October 3, 2024 and sell it today you would lose (0.10) from holding Amarantus Bioscience Holdings or give up 100.0% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	99.26%
Values	Daily Returns

Amarantus Bioscience Holdings  vs.  Nutanix

Amarantus Bioscience

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Amarantus Bioscience Holdings are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile fundamental drivers, Amarantus Bioscience unveiled solid returns over the last few months and may actually be approaching a breakup point.

Nutanix

Risk-Adjusted Performance

2 of 100

Insignificant

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

Pair Trading with Amarantus Bioscience and Nutanix

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

The idea behind Amarantus Bioscience Holdings and Nutanix 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.