Correlation Between Ams AG and Everspin Technologies

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

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

Diversification Opportunities for Ams AG and Everspin Technologies

0.05

Correlation Coefficient

Ams AG  Everspin Technologies

Significant diversification

The 3 months correlation between Ams and Everspin is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding ams AG and Everspin Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Everspin Technologies 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 Everspin Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Everspin Technologies has no effect on the direction of Ams AG i.e., Ams AG and Everspin Technologies go up and down completely randomly.

Pair Corralation between Ams AG and Everspin Technologies

Assuming the 90 days horizon ams AG is expected to generate 50.55 times more return on investment than Everspin Technologies. However, Ams AG is 50.55 times more volatile than Everspin Technologies. It trades about 0.11 of its potential returns per unit of risk. Everspin Technologies is currently generating about 0.07 per unit of risk. If you would invest  975.00  in ams AG on October 4, 2024 and sell it today you would lose (240.00) from holding ams AG or give up 24.62% of portfolio value over 90 days.

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

ams AG  vs.  Everspin Technologies

ams AG

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in ams AG are ranked lower than 8 (%) 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.

Everspin Technologies

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Everspin Technologies are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of very inconsistent basic indicators, Everspin Technologies may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Ams AG and Everspin Technologies

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

The idea behind ams AG and Everspin Technologies 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..