Correlation Between Amarantus Bioscience and Via Renewables

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

Diversification Opportunities for Amarantus Bioscience and Via Renewables

-0.32

Correlation Coefficient

Amarantus Bioscience  Via Renewables

Very good diversification

The 3 months correlation between Amarantus and Via is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Amarantus Bioscience Holdings and Via Renewables in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Via Renewables 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 Via Renewables. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Via Renewables has no effect on the direction of Amarantus Bioscience i.e., Amarantus Bioscience and Via Renewables go up and down completely randomly.

Pair Corralation between Amarantus Bioscience and Via Renewables

Given the investment horizon of 90 days Amarantus Bioscience Holdings is expected to generate 39.96 times more return on investment than Via Renewables. However, Amarantus Bioscience is 39.96 times more volatile than Via Renewables. It trades about 0.1 of its potential returns per unit of risk. Via Renewables is currently generating about 0.06 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.  Via Renewables

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.

Via Renewables

Risk-Adjusted Performance

22 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Via Renewables are ranked lower than 22 (%) of all global equities and portfolios over the last 90 days. Even with relatively unsteady basic indicators, Via Renewables reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Amarantus Bioscience and Via Renewables

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

The idea behind Amarantus Bioscience Holdings and Via Renewables 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.