Correlation Between Ams AG and Alphawave

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

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

Diversification Opportunities for Ams AG and Alphawave

-0.33

Correlation Coefficient

Ams AG  Alphawave

Very good diversification

The 3 months correlation between Ams and Alphawave is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding ams AG and Alphawave IP Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alphawave IP Group 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 Alphawave. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alphawave IP Group has no effect on the direction of Ams AG i.e., Ams AG and Alphawave go up and down completely randomly.

Pair Corralation between Ams AG and Alphawave

Assuming the 90 days horizon ams AG is expected to generate 52.62 times more return on investment than Alphawave. However, Ams AG is 52.62 times more volatile than Alphawave IP Group. It trades about 0.28 of its potential returns per unit of risk. Alphawave IP Group is currently generating about 0.02 per unit of risk. If you would invest  3,721  in ams AG on September 22, 2024 and sell it today you would lose (3,363) from holding ams AG or give up 90.38% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	99.8%
Values	Daily Returns

ams AG  vs.  Alphawave IP Group

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

Alphawave IP Group

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Alphawave IP Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with Ams AG and Alphawave

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

The idea behind ams AG and Alphawave IP Group 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.