Correlation Between Ams AG and U Blox

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

By analyzing existing cross correlation between Ams AG and U Blox Holding, you can compare the effects of market volatilities on Ams AG and U Blox 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 U Blox. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ams AG and U Blox.

Diversification Opportunities for Ams AG and U Blox

0.41

Correlation Coefficient

Ams AG  U Blox

Very weak diversification

The 3 months correlation between Ams and UBXN is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Ams AG and U Blox Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on U Blox Holding 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 U Blox. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of U Blox Holding has no effect on the direction of Ams AG i.e., Ams AG and U Blox go up and down completely randomly.

Pair Corralation between Ams AG and U Blox

Assuming the 90 days trading horizon Ams AG is expected to under-perform the U Blox. In addition to that, Ams AG is 1.84 times more volatile than U Blox Holding. It trades about -0.06 of its total potential returns per unit of risk. U Blox Holding is currently generating about -0.03 per unit of volatility. If you would invest  10,793  in U Blox Holding on October 23, 2024 and sell it today you would lose (4,053) from holding U Blox Holding or give up 37.55% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	99.79%
Values	Daily Returns

Ams AG  vs.  U Blox Holding

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.

U Blox Holding

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days U Blox Holding has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, U Blox is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Ams AG and U Blox

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

The idea behind Ams AG and U Blox Holding 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.