Correlation Between BuilderSmart Public and Ama Marine

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

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

Diversification Opportunities for BuilderSmart Public and Ama Marine

0.84

Correlation Coefficient

BuilderSmart Public  Ama Marine

Very poor diversification

The 3 months correlation between BuilderSmart and Ama is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding BuilderSmart Public and Ama Marine Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ama Marine Public and BuilderSmart Public 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 BuilderSmart Public are associated (or correlated) with Ama Marine. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ama Marine Public has no effect on the direction of BuilderSmart Public i.e., BuilderSmart Public and Ama Marine go up and down completely randomly.

Pair Corralation between BuilderSmart Public and Ama Marine

Assuming the 90 days trading horizon BuilderSmart Public is expected to under-perform the Ama Marine. In addition to that, BuilderSmart Public is 2.31 times more volatile than Ama Marine Public. It trades about -0.08 of its total potential returns per unit of risk. Ama Marine Public is currently generating about 0.04 per unit of volatility. If you would invest  420.00  in Ama Marine Public on October 4, 2024 and sell it today you would earn a total of  2.00  from holding Ama Marine Public or generate 0.48% return on investment over 90 days.

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

BuilderSmart Public  vs.  Ama Marine Public

BuilderSmart Public

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days BuilderSmart Public has generated negative risk-adjusted returns adding no value to investors with long positions. Despite conflicting performance in the last few months, the Stock's primary indicators remain quite persistent which may send shares a bit higher in February 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Ama Marine Public

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Ama Marine Public has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent basic indicators, Ama Marine is not utilizing all of its potentials. The current stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with BuilderSmart Public and Ama Marine

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

The idea behind BuilderSmart Public and Ama Marine Public 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 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.