Correlation Between Clime Investment and AMP

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

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

Diversification Opportunities for Clime Investment and AMP

0.33

Correlation Coefficient

Clime Investment  AMP

Weak diversification

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

Pair Corralation between Clime Investment and AMP

Assuming the 90 days trading horizon Clime Investment Management is expected to under-perform the AMP. In addition to that, Clime Investment is 1.03 times more volatile than AMP. It trades about -0.02 of its total potential returns per unit of risk. AMP is currently generating about 0.04 per unit of volatility. If you would invest  123.00  in AMP on October 24, 2024 and sell it today you would earn a total of  41.00  from holding AMP or generate 33.33% return on investment over 90 days.

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

Clime Investment Management  vs.  AMP

Clime Investment Man

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Clime Investment Management are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Clime Investment is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

AMP

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in AMP are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, AMP unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Clime Investment and AMP

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

The idea behind Clime Investment Management and AMP 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.