Correlation Between Amarantus Bioscience and T Rowe

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

Diversification Opportunities for Amarantus Bioscience and T Rowe

0.03

Correlation Coefficient

Amarantus Bioscience  T Rowe

Significant diversification

The 3 months correlation between Amarantus and RRTLX is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Amarantus Bioscience Holdings and T Rowe Price in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on T Rowe Price 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 T Rowe. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of T Rowe Price has no effect on the direction of Amarantus Bioscience i.e., Amarantus Bioscience and T Rowe go up and down completely randomly.

Pair Corralation between Amarantus Bioscience and T Rowe

Given the investment horizon of 90 days Amarantus Bioscience Holdings is expected to generate 226.76 times more return on investment than T Rowe. However, Amarantus Bioscience is 226.76 times more volatile than T Rowe Price. It trades about 0.1 of its potential returns per unit of risk. T Rowe Price is currently generating about 0.07 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 Together
Strength	Insignificant
Accuracy	99.26%
Values	Daily Returns

Amarantus Bioscience Holdings  vs.  T Rowe Price

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.

T Rowe Price

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days T Rowe Price has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong essential indicators, T Rowe 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 T Rowe

The main advantage of trading using opposite Amarantus Bioscience and T Rowe positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amarantus Bioscience position performs unexpectedly, T Rowe 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 T Rowe will offset losses from the drop in T Rowe's long position.

The idea behind Amarantus Bioscience Holdings and T Rowe Price 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.