Correlation Between Amprius Technologies and FedEx

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

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

Diversification Opportunities for Amprius Technologies and FedEx

0.27

Correlation Coefficient

Amprius Technologies  FedEx

Modest diversification

The 3 months correlation between Amprius and FedEx is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Amprius Technologies and FedEx in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FedEx and Amprius Technologies 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 Amprius Technologies are associated (or correlated) with FedEx. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FedEx has no effect on the direction of Amprius Technologies i.e., Amprius Technologies and FedEx go up and down completely randomly.

Pair Corralation between Amprius Technologies and FedEx

Given the investment horizon of 90 days Amprius Technologies is expected to generate 8.61 times more return on investment than FedEx. However, Amprius Technologies is 8.61 times more volatile than FedEx. It trades about 0.25 of its potential returns per unit of risk. FedEx is currently generating about -0.06 per unit of risk. If you would invest  195.00  in Amprius Technologies on October 11, 2024 and sell it today you would earn a total of  108.00  from holding Amprius Technologies or generate 55.38% return on investment over 90 days.

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

Amprius Technologies  vs.  FedEx

Amprius Technologies

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Amprius Technologies are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unsteady basic indicators, Amprius Technologies showed solid returns over the last few months and may actually be approaching a breakup point.

FedEx

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in FedEx are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of fairly strong fundamental indicators, FedEx is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Amprius Technologies and FedEx

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

The idea behind Amprius Technologies and FedEx 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.