Correlation Between Amphastar and ANI Pharmaceuticals

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

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

Diversification Opportunities for Amphastar and ANI Pharmaceuticals

-0.73

Correlation Coefficient

Amphastar  ANI Pharmaceuticals

Pay attention - limited upside

The 3 months correlation between Amphastar and ANI is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding Amphastar P and ANI Pharmaceuticals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ANI Pharmaceuticals and Amphastar 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 Amphastar P are associated (or correlated) with ANI Pharmaceuticals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ANI Pharmaceuticals has no effect on the direction of Amphastar i.e., Amphastar and ANI Pharmaceuticals go up and down completely randomly.

Pair Corralation between Amphastar and ANI Pharmaceuticals

Given the investment horizon of 90 days Amphastar P is expected to under-perform the ANI Pharmaceuticals. But the stock apears to be less risky and, when comparing its historical volatility, Amphastar P is 1.1 times less risky than ANI Pharmaceuticals. The stock trades about -0.17 of its potential returns per unit of risk. The ANI Pharmaceuticals is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest  5,421  in ANI Pharmaceuticals on December 29, 2024 and sell it today you would earn a total of  1,415  from holding ANI Pharmaceuticals or generate 26.1% return on investment over 90 days.

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

Amphastar P  vs.  ANI Pharmaceuticals

Amphastar P

Risk-Adjusted Performance

Very Weak

Over the last 90 days Amphastar P 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 fairly strong which may send shares a bit higher in April 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

ANI Pharmaceuticals

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in ANI Pharmaceuticals are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak forward indicators, ANI Pharmaceuticals reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Amphastar and ANI Pharmaceuticals

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

The idea behind Amphastar P and ANI Pharmaceuticals 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.