Correlation Between AmpliTech and Data IO

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

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

Diversification Opportunities for AmpliTech and Data IO

0.66

Correlation Coefficient

AmpliTech  Data IO

Poor diversification

The 3 months correlation between AmpliTech and Data is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding AmpliTech Group and Data IO in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Data IO and AmpliTech 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 AmpliTech Group are associated (or correlated) with Data IO. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Data IO has no effect on the direction of AmpliTech i.e., AmpliTech and Data IO go up and down completely randomly.

Pair Corralation between AmpliTech and Data IO

Assuming the 90 days horizon AmpliTech Group is expected to generate 15.06 times more return on investment than Data IO. However, AmpliTech is 15.06 times more volatile than Data IO. It trades about 0.24 of its potential returns per unit of risk. Data IO is currently generating about 0.06 per unit of risk. If you would invest  3.20  in AmpliTech Group on December 1, 2024 and sell it today you would earn a total of  51.80  from holding AmpliTech Group or generate 1618.75% return on investment over 90 days.

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

AmpliTech Group  vs.  Data IO

AmpliTech Group

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in AmpliTech Group are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal technical and fundamental indicators, AmpliTech showed solid returns over the last few months and may actually be approaching a breakup point.

Data IO

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Data IO are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of very weak forward indicators, Data IO may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with AmpliTech and Data IO

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

The idea behind AmpliTech Group and Data IO 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.