Correlation Between Amer Sports, and SIGNA Sports

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

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

Diversification Opportunities for Amer Sports, and SIGNA Sports

-0.82

Correlation Coefficient

Amer Sports,  SIGNA Sports

Pay attention - limited upside

The 3 months correlation between Amer and SIGNA is -0.82. Overlapping area represents the amount of risk that can be diversified away by holding Amer Sports, and SIGNA Sports United in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SIGNA Sports United 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 SIGNA Sports. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SIGNA Sports United has no effect on the direction of Amer Sports, i.e., Amer Sports, and SIGNA Sports go up and down completely randomly.

Pair Corralation between Amer Sports, and SIGNA Sports

If you would invest  1,340  in Amer Sports, on September 28, 2024 and sell it today you would earn a total of  1,512  from holding Amer Sports, or generate 112.87% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	0.44%
Values	Daily Returns

Amer Sports,  vs.  SIGNA Sports United

Amer Sports,

Risk-Adjusted Performance

24 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Amer Sports, are ranked lower than 24 (%) 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.

SIGNA Sports United

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days SIGNA Sports United has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, SIGNA Sports is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Amer Sports, and SIGNA Sports

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

The idea behind Amer Sports, and SIGNA Sports United 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.