Correlation Between Ams AG and NVE

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

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

Diversification Opportunities for Ams AG and NVE

-0.59

Correlation Coefficient

Ams AG  NVE

Excellent diversification

The 3 months correlation between Ams and NVE is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding ams AG and NVE Corp. in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NVE Corporation 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 NVE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NVE Corporation has no effect on the direction of Ams AG i.e., Ams AG and NVE go up and down completely randomly.

Pair Corralation between Ams AG and NVE

Assuming the 90 days horizon ams AG is expected to generate 1.33 times more return on investment than NVE. However, Ams AG is 1.33 times more volatile than NVE Corporation. It trades about 0.12 of its potential returns per unit of risk. NVE Corporation is currently generating about -0.11 per unit of risk. If you would invest  735.00  in ams AG on December 23, 2024 and sell it today you would earn a total of  165.00  from holding ams AG or generate 22.45% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

ams AG  vs.  NVE Corp.

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.

NVE Corporation

Risk-Adjusted Performance

Very Weak

Over the last 90 days NVE Corporation has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's technical and fundamental indicators remain rather sound which may send shares a bit higher in April 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with Ams AG and NVE

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

The idea behind ams AG and NVE Corporation 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.