Correlation Between AMPL and Gold Springs

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

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

Diversification Opportunities for AMPL and Gold Springs

0.06

Correlation Coefficient

AMPL  Gold Springs

Significant diversification

The 3 months correlation between AMPL and Gold is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding AMPL and Gold Springs Resource in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gold Springs Resource and AMPL 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 AMPL are associated (or correlated) with Gold Springs. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gold Springs Resource has no effect on the direction of AMPL i.e., AMPL and Gold Springs go up and down completely randomly.

Pair Corralation between AMPL and Gold Springs

Assuming the 90 days trading horizon AMPL is expected to generate 0.94 times more return on investment than Gold Springs. However, AMPL is 1.07 times less risky than Gold Springs. It trades about -0.01 of its potential returns per unit of risk. Gold Springs Resource is currently generating about -0.03 per unit of risk. If you would invest  114.00  in AMPL on December 30, 2024 and sell it today you would lose (18.00) from holding AMPL or give up 15.79% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	95.38%
Values	Daily Returns

AMPL  vs.  Gold Springs Resource

AMPL

Risk-Adjusted Performance

Very Weak

Over the last 90 days AMPL has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound fundamental indicators, AMPL is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Gold Springs Resource

Risk-Adjusted Performance

Very Weak

Over the last 90 days Gold Springs Resource has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with AMPL and Gold Springs

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

The idea behind AMPL and Gold Springs Resource 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.