Correlation Between Filament Health and Amexdrug

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

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

Diversification Opportunities for Filament Health and Amexdrug

0.0

Correlation Coefficient

Filament Health  Amexdrug

Pay attention - limited upside

The 3 months correlation between Filament and Amexdrug is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Filament Health Corp and Amexdrug in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amexdrug and Filament Health 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 Filament Health Corp are associated (or correlated) with Amexdrug. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amexdrug has no effect on the direction of Filament Health i.e., Filament Health and Amexdrug go up and down completely randomly.

Pair Corralation between Filament Health and Amexdrug

If you would invest  4.35  in Filament Health Corp on September 15, 2024 and sell it today you would lose (1.89) from holding Filament Health Corp or give up 43.45% of portfolio value over 90 days.

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

Filament Health Corp  vs.  Amexdrug

Filament Health Corp

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Filament Health Corp are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile essential indicators, Filament Health reported solid returns over the last few months and may actually be approaching a breakup point.

Amexdrug

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Amexdrug has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, Amexdrug is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Filament Health and Amexdrug

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

The idea behind Filament Health Corp and Amexdrug 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.