Correlation Between Amadeus IT and Squirrel Media

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

By analyzing existing cross correlation between Amadeus IT Group and Squirrel Media SA, you can compare the effects of market volatilities on Amadeus IT and Squirrel Media 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 Amadeus IT with a short position of Squirrel Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amadeus IT and Squirrel Media.

Diversification Opportunities for Amadeus IT and Squirrel Media

0.49

Correlation Coefficient

Amadeus IT  Squirrel Media

Very weak diversification

The 3 months correlation between Amadeus and Squirrel is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Amadeus IT Group and Squirrel Media SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Squirrel Media SA and Amadeus IT 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 Amadeus IT Group are associated (or correlated) with Squirrel Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Squirrel Media SA has no effect on the direction of Amadeus IT i.e., Amadeus IT and Squirrel Media go up and down completely randomly.

Pair Corralation between Amadeus IT and Squirrel Media

Assuming the 90 days trading horizon Amadeus IT is expected to generate 12.12 times less return on investment than Squirrel Media. But when comparing it to its historical volatility, Amadeus IT Group is 3.43 times less risky than Squirrel Media. It trades about 0.07 of its potential returns per unit of risk. Squirrel Media SA is currently generating about 0.26 of returns per unit of risk over similar time horizon. If you would invest  123.00  in Squirrel Media SA on December 29, 2024 and sell it today you would earn a total of  153.00  from holding Squirrel Media SA or generate 124.39% return on investment over 90 days.

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

Amadeus IT Group  vs.  Squirrel Media SA

Amadeus IT Group

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Amadeus IT Group are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady basic indicators, Amadeus IT may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Squirrel Media SA

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Squirrel Media SA are ranked lower than 20 (%) of all global equities and portfolios over the last 90 days. In spite of rather unfluctuating fundamental indicators, Squirrel Media exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Amadeus IT and Squirrel Media

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

The idea behind Amadeus IT Group and Squirrel Media SA 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.