Correlation Between Advanced Micro and Onconetix

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

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

Diversification Opportunities for Advanced Micro and Onconetix

0.75

Correlation Coefficient

Advanced Micro  Onconetix

Poor diversification

The 3 months correlation between Advanced and Onconetix is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Advanced Micro Devices and Onconetix in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Onconetix and Advanced Micro 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 Advanced Micro Devices are associated (or correlated) with Onconetix. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Onconetix has no effect on the direction of Advanced Micro i.e., Advanced Micro and Onconetix go up and down completely randomly.

Pair Corralation between Advanced Micro and Onconetix

Considering the 90-day investment horizon Advanced Micro Devices is expected to generate 0.19 times more return on investment than Onconetix. However, Advanced Micro Devices is 5.4 times less risky than Onconetix. It trades about -0.07 of its potential returns per unit of risk. Onconetix is currently generating about -0.18 per unit of risk. If you would invest  15,077  in Advanced Micro Devices on September 12, 2024 and sell it today you would lose (2,061) from holding Advanced Micro Devices or give up 13.67% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Advanced Micro Devices  vs.  Onconetix

Advanced Micro Devices

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Advanced Micro Devices has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's primary indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Onconetix

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Onconetix has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's fundamental indicators remain very healthy which may send shares a bit higher in January 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with Advanced Micro and Onconetix

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

The idea behind Advanced Micro Devices and Onconetix 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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.