Correlation Between AMP and PICKN PAY

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

By analyzing existing cross correlation between AMP Limited and PICKN PAY STORES, you can compare the effects of market volatilities on AMP and PICKN PAY 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 PICKN PAY. Check out your portfolio center. Please also check ongoing floating volatility patterns of AMP and PICKN PAY.

Diversification Opportunities for AMP and PICKN PAY

0.68

Correlation Coefficient

AMP  PICKN PAY

Poor diversification

The 3 months correlation between AMP and PICKN is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding AMP Limited and PICKN PAY STORES in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PICKN PAY STORES 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 Limited are associated (or correlated) with PICKN PAY. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PICKN PAY STORES has no effect on the direction of AMP i.e., AMP and PICKN PAY go up and down completely randomly.

Pair Corralation between AMP and PICKN PAY

Assuming the 90 days horizon AMP Limited is expected to under-perform the PICKN PAY. In addition to that, AMP is 1.16 times more volatile than PICKN PAY STORES. It trades about -0.1 of its total potential returns per unit of risk. PICKN PAY STORES is currently generating about -0.04 per unit of volatility. If you would invest  152.00  in PICKN PAY STORES on December 28, 2024 and sell it today you would lose (13.00) from holding PICKN PAY STORES or give up 8.55% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.41%
Values	Daily Returns

AMP Limited  vs.  PICKN PAY STORES

AMP Limited

Risk-Adjusted Performance

Very Weak

Over the last 90 days AMP Limited has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

PICKN PAY STORES

Risk-Adjusted Performance

Very Weak

Over the last 90 days PICKN PAY STORES has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest fragile performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pair Trading with AMP and PICKN PAY

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

The idea behind AMP Limited and PICKN PAY STORES 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.

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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.