Correlation Between ST Dupont and Amatheon Agri

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

By analyzing existing cross correlation between ST Dupont and Amatheon Agri Holding, you can compare the effects of market volatilities on ST Dupont and Amatheon Agri 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 ST Dupont with a short position of Amatheon Agri. Check out your portfolio center. Please also check ongoing floating volatility patterns of ST Dupont and Amatheon Agri.

Diversification Opportunities for ST Dupont and Amatheon Agri

-0.08

Correlation Coefficient

ST Dupont  Amatheon Agri

Good diversification

The 3 months correlation between DPT and Amatheon is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding ST Dupont and Amatheon Agri Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amatheon Agri Holding and ST Dupont 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 ST Dupont are associated (or correlated) with Amatheon Agri. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amatheon Agri Holding has no effect on the direction of ST Dupont i.e., ST Dupont and Amatheon Agri go up and down completely randomly.

Pair Corralation between ST Dupont and Amatheon Agri

Assuming the 90 days trading horizon ST Dupont is expected to generate 14.15 times less return on investment than Amatheon Agri. But when comparing it to its historical volatility, ST Dupont is 15.99 times less risky than Amatheon Agri. It trades about 0.17 of its potential returns per unit of risk. Amatheon Agri Holding is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest  2.25  in Amatheon Agri Holding on October 10, 2024 and sell it today you would earn a total of  0.65  from holding Amatheon Agri Holding or generate 28.89% return on investment over 90 days.

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

ST Dupont  vs.  Amatheon Agri Holding

ST Dupont

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in ST Dupont are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, ST Dupont sustained solid returns over the last few months and may actually be approaching a breakup point.

Amatheon Agri Holding

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Amatheon Agri Holding are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Amatheon Agri reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with ST Dupont and Amatheon Agri

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

The idea behind ST Dupont and Amatheon Agri Holding 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.