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

0.07

Correlation Coefficient

Ams AG  Guerrilla

Significant diversification

The 3 months correlation between Ams and Guerrilla is 0.07. 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 1.43 times less return on investment than Guerrilla. But when comparing it to its historical volatility, ams AG is 3.03 times less risky than Guerrilla. It trades about 0.12 of its potential returns per unit of risk. Guerrilla RF is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  155.00  in Guerrilla RF on December 26, 2024 and sell it today you would earn a total of  8.00  from holding Guerrilla RF or generate 5.16% return on investment over 90 days.

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

ams AG  vs.  Guerrilla RF

ams AG

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in ams AG are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak basic indicators, Ams AG reported solid returns over the last few months and may actually be approaching a breakup point.

Guerrilla RF

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Guerrilla RF are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Even with relatively fragile technical and fundamental indicators, Guerrilla reported solid returns over the last few months and may actually be approaching a breakup point.

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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.