Correlation Between Ams AG and Guerrilla

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

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

Diversification Opportunities for Ams AG and Guerrilla

0.73

Correlation Coefficient

Ams AG  Guerrilla

Poor diversification

The 3 months correlation between Ams and Guerrilla is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding ams AG and Guerrilla RF in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guerrilla RF 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 Guerrilla. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guerrilla RF has no effect on the direction of Ams AG i.e., Ams AG and Guerrilla go up and down completely randomly.

Pair Corralation between Ams AG and Guerrilla

Assuming the 90 days horizon ams AG is expected to generate 31.73 times more return on investment than Guerrilla. However, Ams AG is 31.73 times more volatile than Guerrilla RF. It trades about 0.28 of its potential returns per unit of risk. Guerrilla RF is currently generating about 0.0 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 Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

ams AG  vs.  Guerrilla RF

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.

Guerrilla RF

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Guerrilla RF has generated negative risk-adjusted returns adding no value to investors with long positions. Even with fragile performance in the last few months, the Stock's technical and fundamental indicators remain relatively invariable which may send shares a bit higher in January 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Pair Trading with Ams AG and Guerrilla

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

The idea behind ams AG and Guerrilla RF 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.