Correlation Between Amprius Technologies and VeriSign

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

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

Diversification Opportunities for Amprius Technologies and VeriSign

0.8

Correlation Coefficient

Amprius Technologies  VeriSign

Very poor diversification

The 3 months correlation between Amprius and VeriSign is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Amprius Technologies and VeriSign in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VeriSign 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 VeriSign. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VeriSign has no effect on the direction of Amprius Technologies i.e., Amprius Technologies and VeriSign go up and down completely randomly.

Pair Corralation between Amprius Technologies and VeriSign

Given the investment horizon of 90 days Amprius Technologies is expected to generate 6.15 times more return on investment than VeriSign. However, Amprius Technologies is 6.15 times more volatile than VeriSign. It trades about 0.18 of its potential returns per unit of risk. VeriSign is currently generating about 0.23 per unit of risk. If you would invest  204.00  in Amprius Technologies on October 26, 2024 and sell it today you would earn a total of  133.00  from holding Amprius Technologies or generate 65.2% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	97.5%
Values	Daily Returns

Amprius Technologies  vs.  VeriSign

Amprius Technologies

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Amprius Technologies are ranked lower than 14 (%) 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.

VeriSign

Risk-Adjusted Performance

13 of 100

Good

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

Pair Trading with Amprius Technologies and VeriSign

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

The idea behind Amprius Technologies and VeriSign 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.