Correlation Between Ams AG and Medacta Group

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

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

Diversification Opportunities for Ams AG and Medacta Group

0.82

Correlation Coefficient

Ams AG  Medacta Group

Very poor diversification

The 3 months correlation between Ams and Medacta is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Ams AG and Medacta Group SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Medacta Group SA and Ams AG 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 Ams AG are associated (or correlated) with Medacta Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Medacta Group SA has no effect on the direction of Ams AG i.e., Ams AG and Medacta Group go up and down completely randomly.

Pair Corralation between Ams AG and Medacta Group

Assuming the 90 days trading horizon Ams AG is expected to generate 1.99 times more return on investment than Medacta Group. However, Ams AG is 1.99 times more volatile than Medacta Group SA. It trades about 0.11 of its potential returns per unit of risk. Medacta Group SA is currently generating about 0.15 per unit of risk. If you would invest  603.00  in Ams AG on October 20, 2024 and sell it today you would earn a total of  37.00  from holding Ams AG or generate 6.14% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	94.12%
Values	Daily Returns

Ams AG  vs.  Medacta Group SA

Ams AG

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Ams AG has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in February 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Medacta Group SA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Medacta Group SA has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest abnormal performance, the Stock's basic indicators remain stable and the latest fuss on Wall Street may also be a sign of long-term gains for the venture sophisticated investors.

Pair Trading with Ams AG and Medacta Group

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

The idea behind Ams AG and Medacta Group 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.