Correlation Between Ametek and XCHG Limited

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

By analyzing existing cross correlation between Ametek Inc and XCHG Limited American, you can compare the effects of market volatilities on Ametek and XCHG Limited 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 Ametek with a short position of XCHG Limited. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ametek and XCHG Limited.

Diversification Opportunities for Ametek and XCHG Limited

0.41

Correlation Coefficient

Ametek  XCHG Limited

Very weak diversification

The 3 months correlation between Ametek and XCHG is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Ametek Inc and XCHG Limited American in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on XCHG Limited American and Ametek 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 Ametek Inc are associated (or correlated) with XCHG Limited. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of XCHG Limited American has no effect on the direction of Ametek i.e., Ametek and XCHG Limited go up and down completely randomly.

Pair Corralation between Ametek and XCHG Limited

Considering the 90-day investment horizon Ametek Inc is expected to generate 0.18 times more return on investment than XCHG Limited. However, Ametek Inc is 5.66 times less risky than XCHG Limited. It trades about -0.04 of its potential returns per unit of risk. XCHG Limited American is currently generating about -0.12 per unit of risk. If you would invest  18,178  in Ametek Inc on December 19, 2024 and sell it today you would lose (570.00) from holding Ametek Inc or give up 3.14% of portfolio value over 90 days.

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

Ametek Inc  vs.  XCHG Limited American

Ametek Inc

Risk-Adjusted Performance

Very Weak

Over the last 90 days Ametek Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound primary indicators, Ametek is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

XCHG Limited American

Risk-Adjusted Performance

Very Weak

Over the last 90 days XCHG Limited American has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's fundamental indicators remain fairly strong which may send shares a bit higher in April 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Pair Trading with Ametek and XCHG Limited

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

The idea behind Ametek Inc and XCHG Limited American 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.