Correlation Between AMODW and GSR III

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

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

Diversification Opportunities for AMODW and GSR III

-0.19

Correlation Coefficient

AMODW  GSR III

Good diversification

The 3 months correlation between AMODW and GSR is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding AMODW and GSR III Acquisition in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GSR III Acquisition and AMODW 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 AMODW are associated (or correlated) with GSR III. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GSR III Acquisition has no effect on the direction of AMODW i.e., AMODW and GSR III go up and down completely randomly.

Pair Corralation between AMODW and GSR III

Assuming the 90 days horizon AMODW is expected to generate 275.24 times more return on investment than GSR III. However, AMODW is 275.24 times more volatile than GSR III Acquisition. It trades about 0.16 of its potential returns per unit of risk. GSR III Acquisition is currently generating about 0.13 per unit of risk. If you would invest  5.60  in AMODW on October 9, 2024 and sell it today you would earn a total of  1.38  from holding AMODW or generate 24.64% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	80.0%
Values	Daily Returns

AMODW  vs.  GSR III Acquisition

AMODW

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in AMODW are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of fairly uncertain fundamental indicators, AMODW showed solid returns over the last few months and may actually be approaching a breakup point.

GSR III Acquisition

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in GSR III Acquisition are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, GSR III is not utilizing all of its potentials. The recent stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with AMODW and GSR III

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

The idea behind AMODW and GSR III Acquisition 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..