Correlation Between Ams AG and Aeluma

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

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

Diversification Opportunities for Ams AG and Aeluma

-0.19

Correlation Coefficient

Ams AG  Aeluma

Good diversification

The 3 months correlation between Ams and Aeluma is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding ams AG and Aeluma Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aeluma Inc 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 Aeluma. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aeluma Inc has no effect on the direction of Ams AG i.e., Ams AG and Aeluma go up and down completely randomly.

Pair Corralation between Ams AG and Aeluma

Assuming the 90 days horizon ams AG is expected to generate 21.42 times more return on investment than Aeluma. However, Ams AG is 21.42 times more volatile than Aeluma Inc. It trades about 0.18 of its potential returns per unit of risk. Aeluma Inc is currently generating about 0.07 per unit of risk. If you would invest  3,047  in ams AG on October 4, 2024 and sell it today you would lose (2,696) from holding ams AG or give up 88.48% of portfolio value over 90 days.

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

ams AG  vs.  Aeluma Inc

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 weak performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Aeluma Inc

Risk-Adjusted Performance

13 of 100

Good

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

Pair Trading with Ams AG and Aeluma

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

The idea behind ams AG and Aeluma Inc 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.