Correlation Between AmpliTech and Technical Communications

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

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

Diversification Opportunities for AmpliTech and Technical Communications

0.0

Correlation Coefficient

AmpliTech  Technical Communications

Pay attention - limited upside

The 3 months correlation between AmpliTech and Technical is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding AmpliTech Group and Technical Communications in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Technical Communications 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 Technical Communications. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Technical Communications has no effect on the direction of AmpliTech i.e., AmpliTech and Technical Communications go up and down completely randomly.

Pair Corralation between AmpliTech and Technical Communications

If you would invest  39.00  in AmpliTech Group on December 22, 2024 and sell it today you would earn a total of  6.00  from holding AmpliTech Group or generate 15.38% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

AmpliTech Group  vs.  Technical Communications

AmpliTech Group

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in AmpliTech Group are ranked lower than 7 (%) 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.

Technical Communications

Risk-Adjusted Performance

Very Weak

Over the last 90 days Technical Communications has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy fundamental indicators, Technical Communications is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with AmpliTech and Technical Communications

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

The idea behind AmpliTech Group and Technical Communications 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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.