Correlation Between Chardan NexTech and AMPX WT

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

By analyzing existing cross correlation between Chardan NexTech Acquisition and AMPX WT, you can compare the effects of market volatilities on Chardan NexTech and AMPX WT 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 Chardan NexTech with a short position of AMPX WT. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chardan NexTech and AMPX WT.

Diversification Opportunities for Chardan NexTech and AMPX WT

0.61

Correlation Coefficient

Chardan NexTech  AMPX WT

Poor diversification

The 3 months correlation between Chardan and AMPX is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Chardan NexTech Acquisition and AMPX WT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AMPX WT and Chardan NexTech 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 Chardan NexTech Acquisition are associated (or correlated) with AMPX WT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AMPX WT has no effect on the direction of Chardan NexTech i.e., Chardan NexTech and AMPX WT go up and down completely randomly.

Pair Corralation between Chardan NexTech and AMPX WT

Given the investment horizon of 90 days Chardan NexTech Acquisition is expected to under-perform the AMPX WT. But the stock apears to be less risky and, when comparing its historical volatility, Chardan NexTech Acquisition is 2.45 times less risky than AMPX WT. The stock trades about -0.03 of its potential returns per unit of risk. The AMPX WT is currently generating about 0.27 of returns per unit of risk over similar time horizon. If you would invest  25.00  in AMPX WT on October 8, 2024 and sell it today you would earn a total of  20.00  from holding AMPX WT or generate 80.0% return on investment over 90 days.

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

Chardan NexTech Acquisition  vs.  AMPX WT

Chardan NexTech Acqu

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Chardan NexTech Acquisition has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's essential indicators remain strong and the recent confusion on Wall Street may also be a sign of long-lasting gains for the firm traders.

AMPX WT

Risk-Adjusted Performance

21 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in AMPX WT are ranked lower than 21 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, AMPX WT unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Chardan NexTech and AMPX WT

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

The idea behind Chardan NexTech Acquisition and AMPX WT 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.