Correlation Between Beeks Trading and Ametek

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

By analyzing existing cross correlation between Beeks Trading and Ametek Inc, you can compare the effects of market volatilities on Beeks Trading and Ametek 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 Beeks Trading with a short position of Ametek. Check out your portfolio center. Please also check ongoing floating volatility patterns of Beeks Trading and Ametek.

Diversification Opportunities for Beeks Trading and Ametek

0.4

Correlation Coefficient

Beeks Trading  Ametek

Very weak diversification

The 3 months correlation between Beeks and Ametek is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Beeks Trading and Ametek Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ametek Inc and Beeks Trading 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 Beeks Trading are associated (or correlated) with Ametek. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ametek Inc has no effect on the direction of Beeks Trading i.e., Beeks Trading and Ametek go up and down completely randomly.

Pair Corralation between Beeks Trading and Ametek

Assuming the 90 days trading horizon Beeks Trading is expected to generate 3.11 times more return on investment than Ametek. However, Beeks Trading is 3.11 times more volatile than Ametek Inc. It trades about -0.02 of its potential returns per unit of risk. Ametek Inc is currently generating about -0.4 per unit of risk. If you would invest  29,600  in Beeks Trading on October 8, 2024 and sell it today you would lose (400.00) from holding Beeks Trading or give up 1.35% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	94.74%
Values	Daily Returns

Beeks Trading  vs.  Ametek Inc

Beeks Trading

Risk-Adjusted Performance

2 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Beeks Trading are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady technical and fundamental indicators, Beeks Trading may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Ametek Inc

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Ametek Inc are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Ametek may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Beeks Trading and Ametek

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

The idea behind Beeks Trading and Ametek Inc 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.