Correlation Between Amer Sports, and Maverix Metals

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

By analyzing existing cross correlation between Amer Sports, and Maverix Metals, you can compare the effects of market volatilities on Amer Sports, and Maverix Metals 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 Amer Sports, with a short position of Maverix Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amer Sports, and Maverix Metals.

Diversification Opportunities for Amer Sports, and Maverix Metals

-0.45

Correlation Coefficient

Amer Sports,  Maverix Metals

Very good diversification

The 3 months correlation between Amer and Maverix is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Amer Sports, and Maverix Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Maverix Metals and Amer Sports, 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 Amer Sports, are associated (or correlated) with Maverix Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Maverix Metals has no effect on the direction of Amer Sports, i.e., Amer Sports, and Maverix Metals go up and down completely randomly.

Pair Corralation between Amer Sports, and Maverix Metals

If you would invest  2,688  in Amer Sports, on October 13, 2024 and sell it today you would earn a total of  401.00  from holding Amer Sports, or generate 14.92% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	0.0%
Values	Daily Returns

Amer Sports,  vs.  Maverix Metals

Amer Sports,

Risk-Adjusted Performance

20 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Amer Sports, are ranked lower than 20 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady basic indicators, Amer Sports, unveiled solid returns over the last few months and may actually be approaching a breakup point.

Maverix Metals

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Maverix Metals has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong primary indicators, Maverix Metals is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Amer Sports, and Maverix Metals

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

The idea behind Amer Sports, and Maverix Metals 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.

Check out your portfolio center.

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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.