Correlation Between AMP and Block
Can any of the company-specific risk be diversified away by investing in both AMP and Block 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 AMP and Block into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AMP and Block Inc, you can compare the effects of market volatilities on AMP and Block 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 AMP with a short position of Block. Check out your portfolio center. Please also check ongoing floating volatility patterns of AMP and Block.
Diversification Opportunities for AMP and Block
Poor diversification
The 3 months correlation between AMP and Block is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding AMP and Block Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Block Inc and AMP 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 AMP are associated (or correlated) with Block. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Block Inc has no effect on the direction of AMP i.e., AMP and Block go up and down completely randomly.
Pair Corralation between AMP and Block
Assuming the 90 days trading horizon AMP is expected to generate 1.03 times more return on investment than Block. However, AMP is 1.03 times more volatile than Block Inc. It trades about -0.31 of its potential returns per unit of risk. Block Inc is currently generating about -0.45 per unit of risk. If you would invest 174.00 in AMP on December 1, 2024 and sell it today you would lose (38.00) from holding AMP or give up 21.84% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
AMP vs. Block Inc
Performance |
Timeline |
AMP |
Block Inc |
AMP and Block Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with AMP and Block
The main advantage of trading using opposite AMP and Block positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AMP position performs unexpectedly, Block 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 Block will offset losses from the drop in Block's long position.AMP vs. Queste Communications | AMP vs. Red Hill Iron | AMP vs. Hotel Property Investments | AMP vs. G8 Education |
Block vs. COG Financial Services | Block vs. K2 Asset Management | Block vs. Change Financial Limited | Block vs. Carawine Resources Limited |
Check out your portfolio center.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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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