Correlation Between AmmPower Corp and Minnova Corp

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

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

Diversification Opportunities for AmmPower Corp and Minnova Corp

0.13

Correlation Coefficient

AmmPower Corp  Minnova Corp

Average diversification

The 3 months correlation between AmmPower and Minnova is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding AmmPower Corp and Minnova Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Minnova Corp and AmmPower Corp 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 AmmPower Corp are associated (or correlated) with Minnova Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Minnova Corp has no effect on the direction of AmmPower Corp i.e., AmmPower Corp and Minnova Corp go up and down completely randomly.

Pair Corralation between AmmPower Corp and Minnova Corp

Assuming the 90 days horizon AmmPower Corp is expected to generate 14.07 times less return on investment than Minnova Corp. But when comparing it to its historical volatility, AmmPower Corp is 13.32 times less risky than Minnova Corp. It trades about 0.19 of its potential returns per unit of risk. Minnova Corp is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest  0.21  in Minnova Corp on September 13, 2024 and sell it today you would lose (0.20) from holding Minnova Corp or give up 95.24% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	98.44%
Values	Daily Returns

AmmPower Corp  vs.  Minnova Corp

AmmPower Corp

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in AmmPower Corp are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, AmmPower Corp reported solid returns over the last few months and may actually be approaching a breakup point.

Minnova Corp

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Minnova Corp are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile fundamental indicators, Minnova Corp reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with AmmPower Corp and Minnova Corp

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

The idea behind AmmPower Corp and Minnova Corp 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 Commodity Directory module to find actively traded commodities issued by global exchanges.