Correlation Between AmeraMex International and Cypherpunk Holdings

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

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

Diversification Opportunities for AmeraMex International and Cypherpunk Holdings

-0.6

Correlation Coefficient

AmeraMex International  Cypherpunk Holdings

Excellent diversification

The 3 months correlation between AmeraMex and Cypherpunk is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding AmeraMex International and Cypherpunk Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cypherpunk Holdings and AmeraMex International 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 AmeraMex International are associated (or correlated) with Cypherpunk Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cypherpunk Holdings has no effect on the direction of AmeraMex International i.e., AmeraMex International and Cypherpunk Holdings go up and down completely randomly.

Pair Corralation between AmeraMex International and Cypherpunk Holdings

Given the investment horizon of 90 days AmeraMex International is expected to under-perform the Cypherpunk Holdings. But the pink sheet apears to be less risky and, when comparing its historical volatility, AmeraMex International is 2.45 times less risky than Cypherpunk Holdings. The pink sheet trades about -0.04 of its potential returns per unit of risk. The Cypherpunk Holdings is currently generating about 0.29 of returns per unit of risk over similar time horizon. If you would invest  13.00  in Cypherpunk Holdings on September 13, 2024 and sell it today you would earn a total of  174.00  from holding Cypherpunk Holdings or generate 1338.46% return on investment over 90 days.

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

AmeraMex International  vs.  Cypherpunk Holdings

AmeraMex International

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days AmeraMex International has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fragile performance in the last few months, the Stock's primary indicators remain fairly strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Cypherpunk Holdings

Risk-Adjusted Performance

22 of 100

Solid

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

Pair Trading with AmeraMex International and Cypherpunk Holdings

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

The idea behind AmeraMex International and Cypherpunk Holdings 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.