Correlation Between Alphawave and Ams AG

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

By analyzing existing cross correlation between Alphawave IP Group and ams AG, you can compare the effects of market volatilities on Alphawave and Ams AG 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 Alphawave with a short position of Ams AG. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alphawave and Ams AG.

Diversification Opportunities for Alphawave and Ams AG

-0.33

Correlation Coefficient

Alphawave  Ams AG

Very good diversification

The 3 months correlation between Alphawave and Ams is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Alphawave IP Group and ams AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ams AG and Alphawave 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 Alphawave IP Group are associated (or correlated) with Ams AG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ams AG has no effect on the direction of Alphawave i.e., Alphawave and Ams AG go up and down completely randomly.

Pair Corralation between Alphawave and Ams AG

Assuming the 90 days horizon Alphawave IP Group is expected to under-perform the Ams AG. But the pink sheet apears to be less risky and, when comparing its historical volatility, Alphawave IP Group is 1.52 times less risky than Ams AG. The pink sheet trades about -0.12 of its potential returns per unit of risk. The ams AG is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  350.00  in ams AG on September 22, 2024 and sell it today you would earn a total of  8.00  from holding ams AG or generate 2.29% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	95.45%
Values	Daily Returns

Alphawave IP Group  vs.  ams AG

Alphawave IP Group

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Alphawave IP Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

ams AG

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ams AG has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Alphawave and Ams AG

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

The idea behind Alphawave IP Group and ams AG 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.