Correlation Between Amphastar and Assertio Therapeutics

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

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

Diversification Opportunities for Amphastar and Assertio Therapeutics

0.88

Correlation Coefficient

Amphastar  Assertio Therapeutics

Very poor diversification

The 3 months correlation between Amphastar and Assertio is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Amphastar P and Assertio Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Assertio Therapeutics 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 Assertio Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Assertio Therapeutics has no effect on the direction of Amphastar i.e., Amphastar and Assertio Therapeutics go up and down completely randomly.

Pair Corralation between Amphastar and Assertio Therapeutics

Given the investment horizon of 90 days Amphastar P is expected to under-perform the Assertio Therapeutics. But the stock apears to be less risky and, when comparing its historical volatility, Amphastar P is 1.17 times less risky than Assertio Therapeutics. The stock trades about -0.34 of its potential returns per unit of risk. The Assertio Therapeutics is currently generating about -0.16 of returns per unit of risk over similar time horizon. If you would invest  102.00  in Assertio Therapeutics on December 2, 2024 and sell it today you would lose (24.00) from holding Assertio Therapeutics or give up 23.53% of portfolio value over 90 days.

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

Amphastar P  vs.  Assertio Therapeutics

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 conflicting 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.

Assertio Therapeutics

Risk-Adjusted Performance

Very Weak

Over the last 90 days Assertio Therapeutics has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Amphastar and Assertio Therapeutics

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

The idea behind Amphastar P and Assertio Therapeutics 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.