Correlation Between Amper SA and Ercros

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

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

Diversification Opportunities for Amper SA and Ercros

-0.62

Correlation Coefficient

Amper SA  Ercros

Excellent diversification

The 3 months correlation between Amper and Ercros is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Amper SA and Ercros in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ercros and Amper SA 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 Amper SA are associated (or correlated) with Ercros. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ercros has no effect on the direction of Amper SA i.e., Amper SA and Ercros go up and down completely randomly.

Pair Corralation between Amper SA and Ercros

Assuming the 90 days trading horizon Amper SA is expected to generate 2.94 times more return on investment than Ercros. However, Amper SA is 2.94 times more volatile than Ercros. It trades about 0.15 of its potential returns per unit of risk. Ercros is currently generating about -0.23 per unit of risk. If you would invest  10.00  in Amper SA on December 2, 2024 and sell it today you would earn a total of  4.00  from holding Amper SA or generate 40.0% return on investment over 90 days.

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

Amper SA  vs.  Ercros

Amper SA

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Amper SA are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady basic indicators, Amper SA exhibited solid returns over the last few months and may actually be approaching a breakup point.

Ercros

Risk-Adjusted Performance

Very Weak

Over the last 90 days Ercros has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's basic indicators remain rather sound which may send shares a bit higher in April 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with Amper SA and Ercros

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

The idea behind Amper SA and Ercros 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.