Correlation Between AMA Group and Aisin

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

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

Diversification Opportunities for AMA Group and Aisin

0.0

Correlation Coefficient

AMA Group  Aisin

Pay attention - limited upside

The 3 months correlation between AMA and Aisin is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding AMA Group Limited and Aisin in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aisin and AMA Group 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 AMA Group Limited are associated (or correlated) with Aisin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aisin has no effect on the direction of AMA Group i.e., AMA Group and Aisin go up and down completely randomly.

Pair Corralation between AMA Group and Aisin

If you would invest  4.75  in AMA Group Limited on December 1, 2024 and sell it today you would lose (1.35) from holding AMA Group Limited or give up 28.42% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

AMA Group Limited  vs.  Aisin

AMA Group Limited

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in AMA Group Limited are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, AMA Group reported solid returns over the last few months and may actually be approaching a breakup point.

Aisin

Risk-Adjusted Performance

Very Weak

Over the last 90 days Aisin has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable forward-looking signals, Aisin is not utilizing all of its potentials. The recent stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with AMA Group and Aisin

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

The idea behind AMA Group Limited and Aisin 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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.